OK. I'll try to explain this a little better this time. Here goes.

The oil level is a measurement of how much oil is in the tank ONLY.
So what determines how much oil is in the tank? Simple. The ratio between how much oil is being sucked out to how much is being pumped back in.

Now, we know both pumps are positive displacement pumps right? OK. But they are different sizes on the '77 and later engines. The pressure pump is bigger than the scavenge pump. '76 and earlier are equal size. But let's assume for now that the amount being pumped out is the same as that being pumped back in.

Well, thermal expansion contributes to this somewhat, but at 5-8 quarts of oil in the tank, we're only talking about .5-.8 quarts difference at 10% expansion from cold to hot. So where does the rest of the difference come from? (The level reading on these cars drops an indicated 3 quarts or so between cold and hot.)

The lag in flow back to the bottom of the tank where it can be measured by the sending units float.

Where does this lag come from? From the multiple layers of oil strainers in the top of the tank that are there to remove air bubbles from the oil.

The oil is being drawn out at a rate consistent with RPM. It is being pumped back into the tank at a rate consistent with RPM, provided there is enough oil drained back into the case for the scavenge pump to pick up.

So, the oil level should read consistent with RPM, right? But it doesn't. Why? Because the oil being pumped back into the tank is dumped at the very top, and relies on gravity to pull it down through many layers of strainers before it makes it to the bottom of the tank, where it can be measured. The thicker the oil, the longer it takes, and the lower the oil level reading.

And yes, even Mobil one flows better when hot than when cold. Trust me.

Anyone who would like to witness this phenomenon first hand can come and look directly into my '72's oil tank with the cap off, and watch the pool of oil on top of the strainer get smaller as the engine warms up. ('72 is the only year you can do this with, due to the oil tank location, and it's filler tube orientation.)

Tyson.... how would you like to be a teacher with a class full of dummies? ;)

Hmmm.... My front mounted tank has no strainers, and I currently have no thermostat in oiling system, but my oil level goes up when warm also.

That's partly because of the drain back from the heads to the crankcase. The oil still has to drain back down the heads, through the oil return tubes and back to the scavenge pump. The scavenge pumps oil supply is inconsistent, whereas the pressure pump has a guaranteed supply, due to the large reserve of the oil tank. Same situation. Advantage: pressure pump. I'll bet your level is a bit more consistent than ours.

But why doesn't your tank have the strainers? It's pretty important to remove the aeration from the oil.

Not sure why you mentioned the T-stat. I'm not in on the T-stat theory. My '72 doesn't have an external cooler or an external T-stat either, and does the same thing.

Just to point out that opening the stat to cooler doesn't change level. Its a BIG tank, system holds more than 16 qts. There is a strainer type filter in line after the cooler, before the tank, hopefully that removes the aeration. I would guess that the volume of oil helps also.

OK, wow! That's a lot of oil.

Yes I totally agree on the thermostat thing. When the t-stat opens, you are simply exchanging hot oil for cold oil, so it's a wash. No change in volume.

With that volume of oil in the oil tank, yours may be 90% due to oil expansion alone. How much does your reading change from cold to hot?

I'm going to make a preemptive argument here.

Ok, let's say your engine is at 180 degrees and idling. The level on the gauge is at half. If you rev the engine, the oil level drops. The temperature of the oil hasn't gotten cooler, but the level dropped.

If the oil level change was due to thermal expansion alone, this shouldn't be the case.

We know that the level drops with RPM, and we know it drops when cold. The only thing these two have in common, is that they both have an effect on oil flow. The ratio between oil being forced at a constant rate, and oil dripping back into the case or tank. (And then there's all the cold oil clinging to things inside the engine.)