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When a player loses a level due to paying an XP cost to either cast a spell or create an item, could this level be brought back through the use of a restoration spell?

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You can't lose a level by spending XP on spells or items.

From the SRD on spell components, specifically experience components:

You cannot spend so much XP that you lose a level, so you cannot cast the spell unless you have enough XP to spare.

Similarly, from the rules for Item Creation feats:

A character cannot spend so much XP on an item that he or she loses a level.

Restoration cannot restore XP spent on spells or items.

From the spell component rules again:

Some powerful spells entail an experience point cost to you. No spell can restore the XP lost in this manner.

This rule is not explicitly stated for magic item creation, but nothing in the spell description for restoration suggests it can be used to directly recover expended XP:

This spell functions like lesser restoration, except that it also dispels negative levels and restores one experience level to a creature who has had a level drained.

Restoration will restore lost experience levels, but not lost experience points. Since, as above, you cannot lose experience levels by crafting magic items, restoration is useless for recovering XP spent on crafting.

What you're looking for is a Thought Bottle.

The Thought Bottle, a magic item from Complete Arcane (p. 150), will do for you what restoration and its ilk won't. By using its "Experience" function, you can effectively give yourself an XP "save point," spend as much XP as you want on spells and crafting (up to the previously stated limit that you can't spend so much you'd lose a level), and then "reload" your previous XP total.

There's a flat 500 XP cost each time you do this that isn't recoverable, but that's a very small price to pay compared to the amount of experience you're recovering after doing something like, say, casting wish five times in a row to give yourself the maximum allowed inherent bonus to an attribute.

Thought Bottle is an extremely strong item. It basically removes the only meaningful limit on spamming spells with XP components in high level play. Even though there's no real textual ambiguity in how it works, many DMs in my experience consider it extremely cheesy, even when used straightforwardly for what appears to be its intended purpose. Use one at your own (and your DM's) discretion.

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