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The brake pads should be loose. That allows them to relax when you let go of them so they don't drag.

The pads are fine, it's the aluminum plates that engage them that are wearing from waxing and buffing. :cool:

There are several ways to adjust the travel of the brake. First, make sure the pads are not worn down too far. Next, you can change the length of the arm where it connects in the trans. The shorter it is going to the servo linkage, the less travel is needed. It's the green linkage coming...