Both pads must be tight against the rotors. 0.08" clearance is too much.

Don't install the parking brake cables until the system is working correctly.

Un-hook the parking brake cables.

Pump the parking brake levers until the pads are tight against the rotors. 0.08" clearance is too much.

Both parking brake levers must be tight, and they should not "free-wheel"

Unbolt the rear caliper and position it over the rotor so the bleeder valve is level, not pointing down. Tap the caliper as you bleed it to dislodge air bubbles.