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Sorry for the dredge but I'm having exactly the same issue with an 8070 lever. It doesn't seem to spring back as far as it should (has quite a bit of play at the end of its return travel) and braking has got progressively worse over the last few weeks.
Tried to bleed it but just can't push fluid up from caliper to cup, I've pushed quite hard on the syringe but it feels completely blocked. When I press the lever, fluid flows out of the caliper so it seems like there's a block between the master cylinder and the reservoir in the shifter rather than the hose/connectors. The free stroke adjust also doesn't do anything as you mentioned.
Was your fix as easy as removing the shifter from the bars? Any idea what this did to free the blockage? Has it been ok since?
Thanks
I managed to force the oil through again and it kind of pushed the lever back a bit. Still wasn't gravity bleeding. I then took the lever off the bars altogether and the play in the lever went away. I was also able to gravity bleed with the lever off the bar. I let a load of liquid flow through and then clamped it back to the bar, then let a bit more flow through. Completed the bleed process and although it's not perfect, it does work and the lever returns all the way.
Need to test it a bit before setting off to do the Badger Divide on Wed.