Thanks Richard for the reply, I do have a pretty good understanding of how the low level codes are supposed to work, however I dont believe the utility that generates low level codes works correctlyl if the assembly, is also a component on another assembly. I believe the assembly does go to a LLC of 1, but he components below that do not update to 2.
Also I know for sure, that if you manually add the assembly to an existing picklist, the LLC changes to a 1, but the components below that DO NOT uddate to a 2, and the utility does not update the components correctly.