What you describe with getting air out of the filter/sep drain when you squeeze the bulb is perfectly normal.
That little primer bulb/button is just a flexible diaphram, not a pump all by itself. It needs 4 things to work right and draw fuel from the tank.
1. Fuel suction line from tank to water sep must be airtight and be able to pull a vacume otherwise it will suck in air and never lift an ounce of fuel from the tank.
2. Just in past the inlet on the water separator is a flapper type check-valve. When you pull that filter and look up inside the boss where the filter gets screwed on, you will see it. It must be free from debris and be able to form a seal.
3. The bulb itself must be free from leaks
4. On the outlet of the fuel lift pump(found on governor or HEUI pump assembly) is another check valve.
Both check valves and the squeeze bulb/button(and the interconnecting plumbing) form a simple manual pump. You push in on the bulb, fuel and air cannot go back thru the flapper check on the water sep body, so it must go forward thru the lift pump and thru the check valve located there. When you release the squeeze bulp/button, the vacume this creates should seal the check valve at the lift pump outlet and cause fuel/air to be pulled thru the flapper check in the water sep and into that first filter. Eventually you will push all the air out thru the lift pump and suck fuel in from the tank provided you have NO leaks in the 4 items I mentioned or the plumbing between. Opening the drain on the water sep would cause this type leak and keep the bulb from moving any fuel from the tank... That bulb is also not very large, so even if everything is working perfectly, it will still take a long time to pull any ammount of fuel from the tank(which is one reason to pre-fill the filters).
Opening that vent slightly on the secondary filter that 319cssb mentioned and putting a little fuel around it might give you an indication if it is moving any fuel/air thru the system as it should bubble that fuel each time you pump the bulb untill it fills that filter then fuel should come out each time you pump.
What year and engine are we talking about here?
There are other ways to prime the fuel system. One is to disconnect the fuel return line at the tank then inject a little compressed air into the tank thru that port.
CAUTION CAUTION CAUTION the tank is NOT a pressure vessel so too much air can deform and rupture the tank. So this is best done at the tank by someone who is paying attention, so you can see if any deformation starts occuring indicating you have applied too much air.
It only takes a very small pressure to force fuel up the supply line. The elevated air pressure in the tank will force fuel up the fuel feed thru the filter/sep past the bulb thru the lift pump, into and thru the secondary filter then thru the head to the pressure reg and back down the return line. As you apply air to the tank return port, air and fuel should begin flowing out the return line you disconnected so best to run it into a container or you will start wearing it
. Once you only get fuel out of that line, all the air should be purged so you should be able to reconnect it and the engine should then start...
you could also use an electric diesel lift pump or a manual pump to feed fuel into the supply line disconnected at the tank to force fuel thru the system.
