The oil level should be checked with the bike on the centerstand.
I think when checking the oil level, the cap should be screwed in all the way and then removed to see the oil depth.
Many of the RE's have a two position cap.
The outer position if for riding the motorcycle.
The inner, fully closed position is for shipping the motorcycle.
If the motorcycle is ridden with the cap fully closed (screwed in all the way), excessive crankcase pressures will build up and blow the oil out of the sump (usually thru the crankcase vent).