I think that Chris is right. The whole reason I wanted to use a
reservoir is to "buffer" any changes in the hose's volume.

Incidentally, I notice that some people refer to a method where you try
and adjust the "reference" end of the hose to match the reference line
(for each measurement). When I had used a water level before (without
a reservoir) I had found that this method was too time consuming. You
would be moving the refence end of the hose up and down while trying to
let it settle each time. I found it was better to just leave the
reference end alone. When the water settles, just measure the distance
between the reference mark and the water level, then just add/subtract
that from the measurement at the other end. With either method, you
have to run to both ends of the hose, this just eliminates the "playing
around" with the reference end.