And.... *boom*, there goes my skull.
The night lv hindrance is one of the great sources for confusion in night rules. Applying the rule is very easy, but it is so different from all other hindrance rules that it can be hard get your head around. To see whether the night lv hindrance applies, you compare the height of the *terrain* in the hex with the target to the height of the attacker. The height of the target itself is not important. If the terrain in the target hex is one or more levels higher than the attacker, the night lv hindrance does *not* apply. Otherwise it does.
A unit on a level one hill hex fires at a target at level zero. If the terrain in the hex is at level zero (e.g. open ground), the night lv hindrance applies. If the terrain in the hex starts at level zero and rises to level one (e.g. woods), the terrain is still not one level (or more) higher than the firer, and night lv hindrance still applies. If the terrain with the level zero target rises to level two or higher (e.g. jungle, multi-story building), the terrain (at level two or two-and-a-half) would be at least one level higher than the attacker (at level one on a hill hex), and night lv would not apply (even though the *target* is one level below the attacker).
Note that top level of the terrain need not be occupiable to count when comparing levels. Unlike other hindrances the LOS does not matter nor does one compare the attacker and the target. You compare the height of the attacker and the height of the *terrain* in the target hex.
JR