FWIW & IMHO:
I have been there and done that, and it sounds like you still have air in the system. Maybe due to the leak, the fluid level got low enough that it took air in the system.
There was several GM service bulletins dealing with squealing/improperly working power steering systems in late '86 or so. They updated/redesigned the power steering resevoir and enlarged 1 or the lines going from the resevoir to the pump. If you do not have the updated resevoir and return line, I would recommend doing so regardless of whether this is the root cause of the problem or not. Even if it is not, it is definitely not helping the problem. After verifing that you have the updated resevoir & line, I would drain the power steering fluid as much as possible, & then raise the front end up on blocks, but not on the tires/wheels. Move the steering wheel end to end at least 2 times 2 times, refill the power steering fluid resevoir with "Lucas Power Steering Fluid/restorer, move the steering wheel left to right, stop to stop, 2 times to work any air out. Drop the car on the ground. If it doesn't work right, or makes noise after this, you have other problems. I have never heard of a power steering system that Lucas fluid did not cure, other than severly worn pump. GM Document ID no. 434371 and GM Document ID no. 267583. One of the redesigned items involved is a larger power steering hiose no longer available from the dealers but available from Pep boys for about $ 20.00. New resevoir is still available from GM. You might also want to try and just raise the car and move the steering wheel lock to lock without doing any of the other repair and lowering the car and see if it still acts like it has air in the system. Cheap cure at best. I have seen many '87 's without the updated resevoir/hose replacement. In fact, I had one.
HTH
