First check is to make sure your bleeders are rightside up. If the bleeders are down, they will trap air, never giving you a half decent pedal.
Prop valves on TJ's are all the same after either 98 or 99. Jeep modifeid their rear drum setup, and put the same prop valve on everything. Drum and disks.
But, I've run 4 wheel disk on 95 prop valves that worked with no problems.
I never pull the o-ring and get a good balance, although lots of people do and that works as well.
First check your system out for air, then maybe try replacing the o-ring agin just to see what it feels like.
Good luck.