if it sinks, it meens that there could also be air in the system. but how did it get there ?
what are the measurments of the brakes ? if the rotors and drums have been resurfased to many times without being measured they can be well beyond service limit. therefor even with the pads still at 1/2 life the calipers can still be beyond working limit.. causing what your fealing.
i would reccomend bringing it to any shop and have a FREE brake inspection.
i work at a shop on the south west side if your this way.
any good shop will measure all your rotors and drums, all the pads and shoes, inspect the calipers and wheel cylenders, insure good brake ballance, and check all the hoses and hardware.
if your brake pads or shoes are cracked or "cracking" then it will feal like a soft un responsive pedal. (not a droping pedal like your's but soft and less responsive)
TLCA # 20314
84 Hilux, 22re Conversion, 63" chevy rears, Rears up front, Bobbed bed, duel e-lockers, 5.29's, 35" Ground Hogs
Step by Step Bed Bob