I was wondering if it was just the nature of the beast that my front brakes feel especially stiff in the rain. 
Being a Californian I don't often have the pleasure of riding in the rain. My 85 k100rt is my only means of transportation so I ride no matter what the weather. I don't remember the brakes (especially the front) getting this stiff when wet in the past though. There is substantially less lever travel before engaging, resistance then if I continue to squeeze there seems to be another area where the brake engages. 
Is this just a matter of the pads swelling?

That's the layer of water between the pads and the disc causing the apparent initial bite. Initially I thought that it sounds like a dry-weather-only pad and I was going to say 'try replacing them with sintered pads', but if it's a relatively recent and gradual occurrence, I'd check that the brake pads don't have a build up of rust/shite in the caliper that's preventing them from moving freely.

If it were my bike I'd change the pads straight away. I fitted Goldfren S33 pads into one of my K's and they were a good dry weather pad. However in the wet they were frightening and stopping the bike needed lots of forward planning-a bit like stopping or steering a large ship!

Good luck.