If you look back to basic science, you know fluid is not compressible. That's why they use it for brakes. If you are getting a spongy pedal, either there is something getting compressed (air bubble) or something is expanding to take the pressure.
I know you said you used new lines, did you mean new rubber hoses to the calipers? They do go bad over time and even if they don't have age cracks, they can break down internally and don't hold pressure anymore. If you have access to a vernier caliper or something similar, measure the brake hose in a few different places. Then have someone apply the brakes and see how much the hose expands. If it expands noticibly or has a bubble under pressure, replace it. The hose expanding under pressure reduces the effective pressure at the caliper.
Another thing to research is whether your particular MC can be "over bled". I'm not familiar with manual MC's in particular, but I do know certain configurations should be bench bled in a specific manner. If you push the rod in too far, the O rings can become damaged or dislodged which can cause an internal leak so even though there is no air present, the fluid can push past the sealing ring and not generate enough pressure, or leak down over time.
