Here was the problem with the old brake hose. There was obviously something clogging up at the one spot where you can see in the pictures. That spot is exactly where the clamp attaches to the ABS line to hold them together.
Then where the spot was had cracks in it...also in the pictures.
I'm guessing the fluid got down in the cracks and started to swell, not allowing the let the fluid come back and thus keeping the brakes applied.