Did some additional testing with aoe spells and the z axis. When determining range to target for targetted AOE spells, it's taking the vector of x y and z instead of only x and y, resulting in out of range messages while levitating or crossing steep hills, to the extent that you can be considered out of range when mobs are in range to melee you.
Demonstrated by parking a low level goblin at the foot of a steep hill, running up the hill with levitate, and running back to the goblin.
While in air, documented /loc. Out of range.
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Clicked off Levitate, documented /loc from the ground at same (x,y). Spell cast.
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Code:
[Fri Jul 09 10:25:56 2010] an isle goblin warrior was hit by non-melee for 10 points of damage.
[Fri Jul 09 10:25:56 2010] An isle goblin warrior is entwined by roots.
[Fri Jul 09 10:26:07 2010] Your target is out of range, get closer!
[Fri Jul 09 10:26:09 2010] Your Location is -673.15, -8503.37, 100.78
[Fri Jul 09 10:26:10 2010] Taking a screenshot...
[Fri Jul 09 10:26:13 2010] You can no longer levitate.
[Fri Jul 09 10:26:14 2010] You were hit by non-melee for 36 damage.
[Fri Jul 09 10:26:14 2010] YOU were injured by falling.
[Fri Jul 09 10:26:16 2010] Your Location is -673.15, -8503.37, 22.50
[Fri Jul 09 10:26:18 2010] You begin casting Invoke Lightning.
[Fri Jul 09 10:26:20 2010] an isle goblin warrior was hit by non-melee for 26 points of damage.
[Fri Jul 09 10:26:20 2010] An isle goblin warrior has been struck by lightning.