Let me take all the suggestions one by one.
1. Wheel bearings are adjusted properly. With no pads the rotors spin freely.
2. Brackets are brand new. Purchased from Dr Diff and installed last week. Had the same issue B4 that.
3. No residual valve that I'm aware of. Standard A Body to B body disc brake conversion.
4. Inside pad is floating on bracket. Outside pad snaps into caliper.
5. Everything you guys are suggesting is pointing to the calipers. I find that hard to believe, but facts is facts.

Thanks for all the input.