Another interesting point: if you do allow negative levels to affect epic spells (it stands to reason, as they can well be the most powerful spells the caster has), will all epic spells be treated equally (as they're 10th-level spells for some purposes) or is the spell with the highest DC lost first?
If you let the wizard choose what to lose, he'll surely abandon Dragon Knight and keep Dragon Strike, or lose Ruin and keep Vengeful Gaze of God. (If he has that insane spell, that is)