cnick501: When leveling up, is it possible to go beyond Level 8?
If you do all side quests and kill all enemies, you can easily reach level 9. But you have to know details and secret things, much like "robbing the bank" etc; most stuff of which is inside the game guide (not on gog version).
If you found all runes, just do the "MEGA SUMMON" secret spell (3x runes the straight line like letter *I* from downwards to upwards and then the normal, regular, summon spell of level 9). Either a huge rat will appear, or a much deadly Ylside woman. Beating both gives XP, woman gives LOTS of xp plus ultra powerful, unidentified items (i think you cannot identify them) but you can equip them, the sword is so imba it is actually better than the endgame sword you craft through quest and can easily chop down Akbaa, but to defeat her, you have to trap her behind the Goblin City lever-controlled gate.
Beating a bunch of those women and the occasional huge rat, will get you to level 10 in no time. No higher than 10, though, it is the max you can hit. You need a high casting stat and decent mana pool.