Rear brakes 1997 mercury tracer/installed new drums /shoes/wheel cylinders/hardware i bleed brakes but u here a banging sound when you press on b-pedal while driving from rear drums also when car is on jack stands and b-pedal pressed u can turn wheels,

the wheel cyliners need to be replaced ,that is most likely where it is leaking , recommend bleeding the brake system both front and rear after changing the rear wheel cylinders

Does the car have ABS ? And does it have an equalizer block for the 4 wheels ?
It sounds like the ABS has been affected, or there is an equalizer block that is stuck on the front wheels only.
Can you open the bleeder or the rear line on the master cyl and get fluid to come out by depressing the pedal ?

Recheck your work

Did you install new springs?

Flush/Bleed the System?

Turn the Drums?

New Wheel Cylinders?

After you remove the tire, the drim should slide off. If it doesn't then try using a rubber mallet and gently tap on the outside edge as you pull on it. Sometimes you also need to tap on the drum in the center part. I have sprayed penetrating lubes like WD-40 or PB Blaster into the seam at the center. You may also have to back off the parking brake cable or even use the adjuster to back off the shoes.

When I replace rear shoes I always replace the mounting hardware. You didn't mention if your shop did this or not so I would suggest doing so. While there, inspect wheel cylinders. If they're wet or 1 side sticks out farther than the other then you may have an issue with a faulty wheel cylinder. If you notice a pulsing or surging movement when you apply brakes you may have a warped drum - other than these, A hands on diagnosis is needed.
Hope this helps!!

the outer seals to the wheel cylinder are bad. Replace that item

You should look at your rear brakes. The leaking fluid is likely caused by a bad wheel cylinder. The loud noise could have been some of the brake hardware falling out of place causing your wheel cylinders to bleed, which in turn caused your brake system to be without fluid, which caused you to have no brakes.
If you would like to do this on your own proceed: You will need to inspect the rear brake hardware, shoes and wheel cylinders.
Tools: brake spring pliers, brake shoe retaining clip spring tool, screwdriver, sockets, line wrenches
Step 1 Remove rear tires and drums and inspect brakes.
Step 2 Assess the damage. If you've never replaced brake shoes, you may want to just bring it to a mechanic. If you want to do this on your own continue
Step 3 Take a picture of both sides for reference (don't do this step and you will be kicking yourself)
Step 4 remove all springs, bars, clips (there is one piece that has a star wheel on it, located in between the two shoes near the bottom, try not to rotate this), and shoes
Step 5 if the wheel cylinder is leaking replace it
To install, do the reverse.

It appears the rear axle shaft seal is leaking. You will need to pull the axle and replace the seal. Then check the rear end for adequate gear oil. The iron filings I am not to sure about. It sounds as if something came loose from the brakes or brake hardware and got chewed up in the drum. You will need to replace the brake shoes and maybe the brake hardware kit. Always change the shoes or pads on both sides when working on brakes, rear or front. If the inside of the drum is not perfectly smooth it will need to be turned or replaced. If this were brake fluid leaking from the wheel cylinder the master cylinder would be low on fluid and your brake pedal would go down much further than normal.

you have to change the rear to the front line on your master cause of the proportioning valve is not on the good wheel

i think your aware of how to change the brakes if im right and your problem is the rusted drum doesnt want to come off the only way to get the old drum off is to remove adjuster plug from behind drum dustshield and adjust the shoes so that there not even close to the braking area of the drum then try and wiggle the drum off of the assembly if it is not coming off then you need to use the old nylon hammer on the drum and i mean you must hit the drum from side to side trying by hand to wiggle the drum off its a tight fit and you need to strike the drum on the face not on the fins not wanting to damage with persistance and care and patience you will eventually be able to remove the drum to service brakes take care and good luck with it