Hi guys,
Thanks for all the info, this is going to be my go-to thread for brakes work. The first bit of advice (from Rick) sorted out my problem but I appreciate all the other answers. When I opened up the bleed screw the next day more air came out, and I noticed that gaps between pistons and brake rotors disappeared. I guess the system needed time to re-adjust, I did push pistons in so I could remove the brakes and change the pads. I did put copper grease (prevents sticking) between pistons and pads and on brake guides before I installed the brakes back.
Thanks for all the help,
Katz