I'd have no problem measuring the level in the bucket or barrel. In
fact, you don't even need to to that. You can simply begin by taking
the other end of the hose and placing it anywhere to make a reference
mark or measurement. Then all of your other measurements are reference
from that point (which is exactly equal to the level in the reservoir
anyway).

I should have been a little more clear when I talked about the level
"jumping around". I wasn't refering to the bobbing as the level
settles. In another post above, I noted that I had once used a water
level without a reservoir. As the hose was moved around, the hose gets
disorted and its volume changes. This causes the water in both ends to
go up and down. I had thought that I could affix one end to the wall,
make a reference mark, and then leave it. I then notice that as I
moved the hose, the level at the reference mark would change. I got
around it by measuring at both ends for each measurement. With the
reservoir however, I should be able to walk around and take
measurements at one end, with the confidence that the other end is not
changing.