Without sticking my ugly head under the wheel ?? its difficult to give you an instant answer ,but from what you describe it sounds like the disks are worn and the pads have worn right down causing onje of the pads to drop out.So you have a piston popped out which is why when you start the engine the servo is pushing the fluid out but on normal pumping its holding.Renew brake disks and new pads ,also a seal kit for the pistons because if iam correct then you have damaged the seal as well.Also while your doing it because of the age of the vehicle?1994? then i would also renew the front flexible brake hoses ,because then crack/perish and collapse inside the pipes which causes the brakes to hold on.
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