There seems to be a problem in some areas for instance if you on the border were I was were monsters transition from a lower level to a higher level. Now in this case there was 6 monsters in the cave 2 outside guarding it. Since I was not past the border were I would be the correct level the two monsters completely destroyed me. Now if I ran past the border which was some distance in the cave I would agro all 6 again would be completely destroyed so loose loose situation.
The problem with dynamic leveling is at the borders (the transitions) if you are on the low level side and agro a monster from the high level side your dead but can also be vice versa by going to the high level side and drawing in low level monsters both are problems.