Is there anyway you can shift your schedule a bit so you can get more tests in the +7 to +10 time frame? Levemir has a later nadir and from what I can see, it looks like Heff onsets around +4 and nadirs around +8 or later, even at +12. Those +3 tests at night aren't going to tell you much about the night cycle, cause he won't have onset yet. A +4 test at night would be more telling, or even a +10. I'm just worried that you've increased from 3.0 to 3.5, without enough mid cycle data to tell you if that dose was a good one.
I don't think he's on too much insulin, but since you've started to see green, I'd make sure to gather more data around the nadir time before deciding on future increases. When cats switch from Lantus to Levemir, we suggest starting at 70% of the Lantus dose as some cats need less Levemir (but not all). Since Heff was on 5-5.5U of Lantus, we would have suggested starting around 3.5 units of Levemir. to start.
And yes, cats still bounce on Levemir - Neko is a prime example, but I can name some names of even worse Lev bouncers!

Some kitties flatten out more on Lev, and I am grateful that Neko is one of those, less big bounce causing drops. It also takes time for kitties to learn to work the insulin, Heff has only been on Lev a month and a half. He will get there.