the correct adjustment is to let the shoes lightly drag the drum. timkin made complete rear differential assemblies,including brakes for many years, mostly for g.m.. if you remove the rear drums i highly recommend coating the moving parts with antiseize, being careful to not slop any on the shoes. i would also be real suspect of that master cylinder, and would attempt bleeding the brakes to see how much fluid comes out, and the color of it. remember brake fluid attracts moisture.
