Ok. I'd like to take the time to reassure you that everyone goes through this at some point or another. No one likes to lose their equipment to the level thieves, but you should also realize that it is a necessary, if frustrating, part of the game.
What the game is actually doing is checking you on logout. The game measures your level as opposed to the level of the item and runs an equation to see if you keep said item. The closer the difference, until you are equal to or greater in level, the less chance the item will disappear.
Obviously, if you have a grand master item at level one, you will almost certainly lose it on your first log out, but nothing is ever 100% certain until you attain the items level.
Durlik wants to make a game that doesn't defy logic. Yes, this is a fantasy MUD, and some will debate whether or not certain rules and aspects are logical, but what he doesn't like seeing is "you can't do that."
In SK, you can wear anything you like. A level one character can be decked out in the best equipment in the game. This is a good and beautiful thing. Casters can also wear heavy armor, for a price.
The problem with the system is that it is abusable, and, so I believe, was abused quite a bit before this level thief system was implemented. People would use low level characters to hoard all of the good items in the game. This type of action is against the rules in many ways, but this hoarding kept items safe either for personal use or against the item being used by an enemy.
It's all fun for the person hoarding everything, but it severely limits the play of others. Thus, we have the level thieves. Just imagine if all of the stuff you had was never seen in the game again because some jerk decided that no one but him was going to touch it. They don't completely stop hoarding, by any means, but they do limit it to some degree, where as it would be limitless without the level thieves.
I hope this makes you feel somewhat better and that you continue to play the game. No one is trying to lord over you with some elite skill, and, despite how the hard core nature of the player base may make you feel at times, we generally like having new players around.
So, take it easy, look around for some new stuffs, and stick around to see some of the less frustrating parts of the game.
Welcome to SK,
-Randy