I’m having similar issues – If I use the option of reducing a volume from the cease to flow, it sets my initial water level correctly.
If I use the correspondent level (m RL), it gives me the surcharge error.
Ex.: My spillway is at elevation 100 m RL and I want the IWL to be 99 m.
my stage-storage reads as follows: 99 m RL = 10 m3 and 100 m RL = 17 m3.
To get the initial water level at 99 I should input -7m3 as initial drawdown.
for the option of the initial water level at 99 m, it gives me the surcharge error.
If I put 1 m, it will understand a value that I don’t have in my stage storage, so it will consider that my pond is empty, with 0 m3 initial storage