Taking Long Rest

Before you enter the ruins, you should level up to 4.   There are 2 quests available when you get back from Caer Lem.  Goblin Culture and Sorak Relic.  Do both of them, and after continue thru the map (where you jump over all the stone columns) and fight 6 spiders.  These 3 encounters plus the return XP from the questboard will push you from level 3 to level 4.    

Btw, the Sorak Relic is level 4 difficulty, but there is a tactic which works well.    Post a tank at the mouth of the mushroom cave.   You reduce one of the two assasins to doing nothing and they cannot enter the cave.    Cast shield of faith on the tank.  The other 3 stand behind him can take range shots.  If they have Protection, the tank can attack normally.  If not, the tank must dodge every round.  This has always worked for me, on Cataclysm. 

Now this really sucks.

I'm at the beginning of the Abandoned Tower, where  you get the Crown.

Just got inside, before the library, and noticed my people need to level up.

BUT, there is no place to rest, and you cannot exit the dungeon.

So, that means everything I do until I get that door opened...is lost xp.

why would you lose XP?  it is cumulative

Maybe I don't understand how the system works. I thought everything you did counter for wherever you are.

I solved the problem though. I reloaded and made sure I was 4 before I went in.

You keep gaining XP and don't loose any, you can even bank up multiple levels of xp before gaining levels.

You keep gaining XP and don't loose any, you can even bank up multiple levels of xp before gaining levels.

How do you do that?

The game automatically tells you to upgrade.

However, you continue to amass XP, even after you are "full" to level. In theory, if you choose not to level up and amass enough xp, by the time you choose to hit that level up button, you will have enough banked to level up more than once.