This is a really good thread, with a lot of very interesting points. I won't repeat them, but here are a few bits to fill in some holes.
First, keep in mind that the feudal system varied dramatically over periods and between nations. (In fact, part of why the English system was so effective for the king was that, following the Norman conquest, William basically built an entire feudal nation from the ground up, using all the best practices of the time without being hamstrung by existing traditions and agreements.) So nothing is definitive; any points made in this thread (including my own) might be true in some areas and times, but not in others.
Here are some bits and pieces:
Taxes: The OP mentioned that Sir Stanley paid taxes in addition to his military obligation. Actually, he probably only owed the military time, with no additional taxes required. If the king called him up for war, he might be able to get out of it by paying a fee. (Same for the peasants: They rarely paid cash taxes to the local lord, but paid for their land with their time, working the lord's land. Cash taxes came later.)
Service time: As someone mentioned, there were limits to the length of service. In England, it was generally 40 days--that applied both to knights and to peasant footsoldiers. Better get that campaign moving quickly!
Loot: It's true that peasants rarely benefited from ransom, but they could do quite well in looting. Technically, they only got to keep a small portion of what they took, with the rest going to their lord (who passed a portion up the chain, and so on). However, small items were often overlooked (and coins are pretty small), and even when the rules were followed, a peasant could end up with booty equal to many years worth of income. Thus, despite the high mortality rate, under the right circumstances (an enemy perceived as rich and weak), going to war could be quite appealing even to the peasants.
Levy and borders: As pawsplay mentions, peasant levies often couldn't be sent beyond their own borders. Keep in mind, though, that feudal borders were often less simple than modern borders. In the 100 Years War, a levy from Wales could easily, and legally, end up serving in southern France, as both were holdings of the English king. Also, if the border in question is contested--if the king says he's taking back land that's rightfully his--can the peasant levy refuse to cross it? (The answer: Maybe. Despite the authoritarian nature of the feudal system, getting 10,000 people to do something they don't want or feel obligated to do can be tough for even the most brutal of overlords.)
Ransom: It's my understanding that peasants couldn't get ransom. Yes, they might capture a knight, but then they'd turn him over to their lord (who, if generous, might reward them for it. Or might not.). The idea of a noble being the captive of a commoner was anathema to the feudal worldview. Also, I think the captor did in fact keep the captive's stuff--that was the case even in tournaments, let alone real wars.