Rats. That is a very serious problem and the repair is going to be expensive. Brake fluid must never have even the slightest hint of a petroleum product in it including engine oil, transmission fluid, power steering fluid, wheel bearing grease, etc. Mechanics even wash their hands before working with brake parts to avoid getting fingerprint grease in the fluid.
Every year I did a demonstration for my students to show what happens. I had two beakers with clean, fresh brake fluid and a rubber wheel cylinder seal. Those rubber parts are only compatible with glycol products which is what brake fluid is. In one beaker I added one drop of power steering fluid or engine oil. By the end of the week that seal had become soft and mushy and had grown about 20 percent in size. In your brake master cylinder, the lip seals will grow past the return ports and block the brake fluid from returning after you release the brake pedal. The symptom at first will be the brakes don't release and you'll have to push harder and harder on the accelerator to keep the vehicle moving. The dragging brakes will heat up which will eventually wear the linings out, and the trapped brake fluid will expand and apply the brakes even harder. That creates a vicious circle that eventually locks up the brakes and you can't move.
If you make it past this point, the seals in the master cylinder will deform and fail to move any brake fluid. The brake pedal will go to the floor and there will be no brakes.
The ONLY proper fix for this is to remove every part in the brake hydraulic system that has rubber parts inside, flush and dry all the steel lines, then install all new parts and bleed the system. That includes front calipers, rear calipers or wheel cylinders, four rubber flex hoses, master cylinder, the combination valve, and the rear height-sensing proportioning valve if your vehicle uses one. If you have anti-lock brakes, the hydraulic controller must be replaced too because it has rubber o-rings and seals inside. That can total some vehicles out due to the very high cost.
Way too often we read about someone trying to save a few bucks by not replacing every part, ... Usually rear wheel cylinders, because the thinking is they're so far away from the master cylinder. In reality, if any rubber part is not replaced, the contamination will leach out of it and recontaminate all the new parts and you'll have to start all over.
Friday, August 1st, 2014 AT 5:22 PM