Am trying to find recommended engine oil level & whether it is checked with bike on sidestand or bike upright (96 WG). 

Confusingly my workshop manual mentions a sidestand check on one page then very next page mentions check with bike upright!

I'd say that I have complicated getting a meaningful dipstick reading by having added an oil cooler & also having lowered the rear by an inch. Also, it may be that the tank non-return valve is actually passing so there is actually plenty of oil in the crankcase. Suppose a good start would be to check/get a new valve. 

Over time I have just gotton a feel for how much oil to have in the tank, checked on sidestand it just registers on the dipstick (about 5mm), bike upright it just shows above 'add quart'. Adding any more causes it will blow out the crankcase breather so obviously this is where I run with it.

I realise I may have answered my own question - just was interested in hearing of any similar experiences of others perhaps with these early Dynas or otherwise. 

  

 

I always check mine on sidestand. You shouldn't have oil in the crank case

This is for a '94 FXSTS, straight out of the service manual.

"The dipstick does not have an upper or full mark. The tank is full when the oil level is at the bottom of the rubber seal on the fill plug with motorcycle upright. Do not fill above this level because the tank needs some airspace."

On the sidestand with the bike sitting where you normally leave it overnight (that ways its cold and a repeatable test)

Then just fill up to whatever height you want and check each morning for a couple of weeks as it will settle down to its 'natural level' (mine is about an inch above the lower mark - no matter how much i stick in it goes down to this level and sits there). Once your happy the level has settled then use a file to make a small nick/mark on the dipstick to mark the 'normal' level for yur bike. At least then you have a point of reference for checks and for filling up after an oil change.