2005 Dodge Durango no brake pressure

When the brake pedal is depressed when the car is off it gets tougher after about 2-3 strokes then stays pretty tough. When the car is running the pedal can be depressed all the way to the floor with no problem and a hissing noise can be heard from the what I think is the pressure differential valve, the two lines that come out of the master cylinder (pressumbably one for the front brakes and one for the back) feed into that and then four lines (one for each wheel I think) go out of that and I have traced the front two to the wheels to verify that. Before we replaced the brake pads the brakes worked fine. We replaced them correctly and there is no air in the lines and there is plenty of fluid in the reservoir. If the brakes are pumped 4-6 times the brakes will stiffen up about half way of normal but then after I wait 10-20 sec the brake pedal goes back to as slack as it was before. The ABS works fine. But only when the brake pedal is depressed to within 1-3in of all the way then the brakes work, at the very end of the stroke, but the rest of the way there is no resistence. What's wrong with the brakes!