Sorry for the late reply, I've been out of town for the last week.
Level is the standard thing to measure, as air volume remaining inside the fork is the metric you really care about. The air left inside the fork leg acts as a progressive spring, so it has a drastic effect on handling. You want to measure with the leg fully collapsed and the spring removed. The level should be around 155mm if I remember correctly, but it'd be worth a call to Dan Kyle to check if there's not a level published in the service manual (I don't have a manual for the R).
I was talking about the o-ring that seals the fork cap to the fork stanchion. There are two others. There is also an o-ring that seals the preload adjuster to the cap, and another that seals the rebound adjuster to the preload adjuster. It'd be worth inspecting all three for damage. This would definitely cause your "squish" noise as air passes the fouled o-ring on the compression stroke and is sucked back in on the rebound stroke.
See
http://www.zupin.de/uploads/tx_userzupindownloads/OM_07282-02.pdf for a 43 R&T manual including exploded diagrams on page 7. Ohlins' preferred method of measuring oil level is with the springs still in, but every other manufacturer or service technician I've ever spoken with (including myself) does this with springs out, and that's how numbers are generally published.
no worries..
I completely understand what u r saying. I still havent tested this bike on the twisties so idk how it performs yet. . (Busy with work)
However I went out for 200miles after I did the fork seals and had no problems with anything .. the forks deep in equally.. I have straps onnboth forks that way i see the travel .
Now my question to u is : can I keep them like that for the rest of the season? Is there anything in there thats going to be damaged if the oil level is not set at 155mm ? Other than performance. I really dont have the time to redo them . Let me know . Thx