Hy 3B. You were right! I went back this morning and the wheels were turning freely. It amazes me at the knowledge you guys have!
After seeing they turned freely, without starting the engine, I pumped the pedal a couple of times and it felt normal. The wheels still turned freely. THEN, I started the engine and pumped the pedal a couple times. LOCKED up again. Even the brake lights were on. (it has the switch inline).
I should have learned by now, not to take short-cuts. I honed and rebuilt the master cylinder myself, about a year ago. I do have the return spring on, and the correct free travel in the linkage.
I guess now I should call Midwest and get a new MC.
Thanks for your help, I am just glad I don't have to pull the rear hubs again.