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I did a bit of reading, which I suppose I should have done before I first posted.
It appears the issues with biodiesel mostly relate to some of the filter regeneration systems, which have a second post-combustion fuel injection into the cylinder. This fuel is vaporized and is then burned in the exhaust filter, to de-carbonize it.
Bio-diesel is less volatile, so it doesn’t vaporize as well, and can increase fuel dilution of the lubricating oil.
http://savebiodiesel.com/chevron_dpf.pdf
Due to its polarity, there also seems to be the possibility that it will be incompatible with some of the polar additives in engine oil, leading to increased engine wear. I didn’t find any reports of in-service failures, so it seems to be a current theoretical/experimental concern rather than an established fact)
http://www1.eere.energy.gov/vehiclesandfuels/pdfs/deer_2007/session5/deer07_sappok.pdf
Biodiesel (unlike vegetable oil) is chemically quite stable, so it shouldn’t gel the oil or stick the rings to the extent that SVO can, which can cause catastrophic engine failure.
Another issue is that most commercial biodiesel contains up to about 20 percent methanol/ethanol (Note: This isn’t “drain cleaner”) which can trigger false "water in fuel" warnings displayed by the engine management system, which misreads the alcohol as excessive oxygen and often sends a "check engine" warning along with the "water in fuel" warning.
OTOH, there is some experimental evidence, (promoted, naturally by the biodiesel lobby, but apparently from independent sources) that biodiesel soot can be more easily oxidized in the filter, and so can reduce its effective operating temperature. http://savebiodiesel.com/40015.pdf.
Reported effects of biodiesel on various catalyst and filter systems were mostly negligible or slightly positive. http://savebiodiesel.com/42928.pdf
The OP is apparently well aware of these issues, and probably is NOT confusing SVO with biodiesel. (I apologise for that assumption).
I still think he’s wrong in saying:-
(a)“the oil levels can rise due to the DPF not being able to regenerate” The oil levels can rise due to dilution with the unburned fuel introduced by the DPF regeneration system, and can rise whether the DPF regenerates or not.
(b) “given that this wouldn't happen, the DPF would fail to regenerate. (Obvious answer but needs to be asked)” I don’t think its an obvious answer. I think (from the little reading I’ve done) that its unclear whether biodiesel would interfere with regeneration, BUT it seems that it may increase ash deposition and so reduce the life of the catalyst.
( C ) “I have a very simple (i hope) question.” No you don’t. You have a series of rather complex, controversial questions that (so far) no one has been able to answer, and which are currently topics of active research.
Faced with that uncertainty, you’d better do whatever the manufacturer tells you. They are probably hedging their bets as well.
This site gives current manufacturers recommendations for the US market. They seem to range from B5 (the norm) to B20
http://www.biodieselfoundation.org/docs/vehicles/2013-diesel-vehicle-list.pdf?sfvrsn=2
One detail caught my eye.
2014 Audi Q5 TDI: Approved for B5 Biodiesel Blends (up to B20 in Illinois)
Why would it be different in Illinois? Better fuel? Independent testing ?? Bean farmer lobby???
Like I said, this seems to be in a state of flux, so you’d better be cautious.
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