Problem solved. I found this piece of metal on the rubber plug of that bleeder valve:
Wow, what a major hassle for something that would have taken me 30 seconds to fix had I only asked when the problem first occurred. I guess they call that "a lesson". Now I have to take it all apart to properly seal all the fittings, there's another 30 minutes into this thing.
Thanks again for the replies and good information. My compressor is up and running just in time to start nailing trim in our basement...
