Okay, I have achieved nourishment. Onward.

4) In order to get higher level deltas, I first apply my subD 0 deltas to the welded base mesh and subdivide it once. That gives me a partially morphed subD 1 mesh. I repeat the baking down process from step 2 with that new mesh as my base mesh to obtain "raw" level 1 deltas. From these I construct proper, but sadly only approximate level 1 deltas by taking only the displacement along the surface normal into account. Applying the "corrected" deltas to my partially morphed subD 1 mesh gives me a fully morphed subD 1 mesh, and I repeat the process to construct level 2 deltas and so forth until I've reached level N.

-- I'm not mad at you, just Westphalian.