The BII uses the same (horrible) design for the clutch hydraulic system as the first generation (1990 - 1994) Explorer which I've replaced twice on our Explorer. The clutch master cylinder is indeed below the reservoir at the end of the hose and there is nothing related to the clutch on the other side of the firewall from the reservoir. 90% of the time on the BII / Explorer when the clutch hydraulic system fails it's because the seal on the slave cylinder blew out or rotted away.
I would bet dollars to donuts that the slave cylinder is the culprit in this case. As shdesigns
pointed out, check around the bellhousing of the transmission and see if there is any hydraulic fluid or wetness present. If there is then you've found the problem. Do yourself a big favor (if it is indeed the slave) and buy a replacement from Napa or a Ford dealer. It will cost a bit more but it's an updated design and differs greatly from the one you'll get at Autozone / Advance / other discount chains.--
I'll be stretching out the rhyme like gravity stretches time.