I did another run tonight and did two things different. First, I set all my project settings (smoothing, contour interval, major/minors, interpolation, etc) including the water level offset, before I defined the map area in the project. I had been doing this after defining the map area.
Second, I ran only CSV data instead of existing CSV data plus any newly added sl files. So all new files were converted to CSV and then reloaded into the asset list so that it was 1500 CSV files only. (Ya, I have a lot of data!)
Not sure which of these made the difference, or if it was something else entirely, but the water level offset was correct when I generated the first map. Each time I changed the water level offset number for subsequent map updates, the change took effect. The "generate map" tab turned tan each time I changed the number, green when finished.
So, fixed for now . . . !!!