If you are not leaking any fluid out, then the Master Cylinder is the likely culprit. Air in brake lines usually accounts for a spongy pedal, but not one that drops like that.
Also, these cars aren't known for having the most robust of master cylinders.
When you source a replacement, remember there are 2 lengths, make sure you get a correct one. Also remember too that refurbished units don't typically last very long. I am due for #4 since april of '08.