I've had exactly the same problem though on ATV, since day one. It took one year to find the problem, so my experience may give you some ideas on what to look at on yours.
Symptoms on mine were:
- Brake lever spongy
- The longer I ride, brake lever becomes more and more spongy
First thing I discovered was, after 10 km's of riding using brakes, wheels (in plural because I'm talking about ATV), wheels started to brake by themselves. Then they would become hot, then very hot. By the logic, pads where dragging on the disk (that is why you had squealing) and after some miles brake oil would become very hot and expand. Pads would get very hot as well and their braking ability would get reduced dramaticly. Before all that diagnosys I also changed the fluid but there was no improvement.
So, I started to look for a reason and found one brake line cramped that didn't allow pads to retract completely and after brake oil gets too hot it doesn't even metter anymore, brakes were actuating by themselves.
So, you need to find the reason why your brake pads are dragging. Start with bike cold, engine off, move it by hand and see if wheels move freely. Then ride some time using brakes and do the same test with engine off. In both ocasions, wheels have to move freely. Touch close to the center of the wheel, is it hot? It shouldn't be.
One more thing, that ATV that I'm talking about had adjusting screw on caliper, that controlled the retracting of pads. Service Manuals always called attention not to screw it in too much as it would provoke brake pads to drag. It served when pads get worned a bit, you would screw it in just a bit so pads don't shake too much between disk and calipers. Does your bike have adjusting screw that needs to be backed up a bit?
I still don't own V-Strom so can't help you much more but had many years of experience as car mechanic.
Just as a note, the ATV I was talking about was not a piece of junk, it was Polaris Sportman Touring 850 PS and I paid 15.000 euros for it. It was top of the line at 2011 and it's now waiting to be sold so I can get myself a Wee (or Glee, who knows).
This was just general idea, something maybe simple to fix. In the worst case scenario there is one of the seals in caliper broken or one of inner seals in master cylinder (if your bike has one). But that's just the worst case, it's probably something simple as it was on my ATV.
Ah, one more thing. My pads were wearing too fast. Lost 3/4 in one year, then after fixing the problem, one year later they were the same. Are yours wearing too fast?
