You heard wrong about having to be higher level to get better items.
the ONLY reason you should be higher level is your character will have more stats at higher levels.
You could kill mephisto at level 1 with 800 magic find and he has the same chance to drop anything he can drop if you were level 99 and had 800 mf and killed him.
So to answer your question: The higher the better because you're tougher and can kill him faster.
Oh yes and to add to fritfrats' comment, Meph cant drop the UBER L33T items, but there is one thing i'll say:
In the same time you do meph runs to get stormshields, gazes, doombringers, shakos, you could do just as many pindle runs and come up empty handed. My suggestion is that if you want uber l33t items, kill mephisto and trade the stuff you get from him. Build up a nice stockpile of shako's and stormshields, and gazes, and trade them for your WF, or Griz's helmet, or whatnot.