I don't know the proper level to run in an engine but I can relate an experience concerning this subject. Sever or eight years ago I had the pleasure of riding co-pilot in what I consider one of the fastest 320/360 ever built, for the Sun-n-Fun race.  We were zipping along on course indicating about 250-260+ mph and had just passed the first or second turn when all of a sudden it felt as if someone had kicked the gears into neutral and we slowed instantly about 50 knots.  A glance at the showed the tach running up at 3000++++++ and the prop in flat pitch.  We pulled up for altitude and retarded the throttle.  About the time we leveled off the prop switched from no pitch to a bunch of pitch and we applied power again to keep from coming to a complete stop.  From then on all worked as normal.  We headed by for Lakeland and landed safely.  The MT 3-blade was serviced and found in good condition. We were running 6 quarts and Lycoming reps. on location said the oil may have been low enough in those conditions to cause cavitation allowing the prop to starve.  I don't know what caused it but he ran 8 quarts from then on and I will never forget my life flashing before me for an instant.