Hi Mark. Our first engine was from Bob, and also didn't have any markings on the dipstick. I did as you described, which is to add quarts, let the oil settle, and mark the dipstick. That worked just fine. Our current engine is a factory Lycoming. It's marked every three quarts, which also works fine. I don't really have any concept for "full" when it comes to Lycoming oil levels. If you add too much and run the engine, it will vent the excess overboard and return itself to where it wants to be. The range between that point and not having enough oil is probably something like 4 or 5 quarts.
I think of Lycoming oil levels much like EGT values, in that their absolute value is not meaningful at all, but their relative value and their trend is what really matters. Honestly, you could label the dipstick with letters if you wanted to, although it is nice to have a sense of how much oil you'd like to add to get up to a level that you have in mind. I find if I'm adding more than a quart at a time, it probably means I went too long without checking. But there's also a lot of inaccuracy on the dipstick. A change in the level of the parking position, either left-right or front-to-back, or a change in tire size, can all upset the norms for your usual dipstick levels.
Even if nothing changes as far as the attitude of the plane, you'll also find a lot of fluctuation of the dipstick level, which is indicating the oil in the sump, because the oil isn't always in the sump. It's also in lines, passages, the oil cooler, the propeller, and all of those kinds of places. Some folks find that right after an engine run, the sump level is its lowest, and then a day or two later, the sump level rises as that oil settles back into the sump. It's probably not accurate to assume that the total amount of oil in the engine correlates to any numbers on any dipstick of any engine.
