Yeah, but a whole level loss is rather steep for DR 10/- that only absorbs 40 points, which is easily bypassed by many creatures. Heck, a normal CR 3 Ogre with Power Attack can still deal considerable damage. It'd be better if, say, you can absorb 40 per day or you can absorb up to 40 before it's lost forever but if you don't use it all it resets the next day.
Clearly this template is designed for NPCs, because a PC would be REALLY peeved to find out Divine Endurance costed him a whole level...and it's not that potent an ability, really. Not when trolls or hill giants smack you for 30+ damage in one hit.
I'm house ruling it to be a once per day thing. I think the LA is worth +1 if you can ignore 40 damage per day, especially considering at higher levels you will lose that in exactly four hits.