Yes, bleed the brakes (it might be a good idea to remove the old brake fluid with turkey baster and flush the brake system completely; brake fluid absorbs water).

Also:
-inspect each brake caliper(or drum) for leaks
-look at where the master cylinder attaches to the vacuum assist. If the paint on the vacuum assist below the master cylinder is bubbling up, you might have to replace the master cylinder seals (or the master cylinder itself).