Yes, 8 separations of color or B&W tonality. That's my understanding too Craig.
If I understand, you want each separation on it's own layer. Rather than using color range, try the magic wand or the quick select. You'll need to play with settings, eg: tolerance if you use the wand. You'll also have to use the alt/opt key (most likely) to deselect and reselect bits and pieces as you go. The quick select "learns" the pixel color/tone edges you want to use as you select and deselect. Seems clumsy but it works fairly well.
(You might also consider making your selections to layers first, but that would totally depend on the image and what you want to do. Seems you want to create the levels first so this comment is irrelevant!)
Here's an example using the quick select
[ATTACH]32165[/ATTACH] [ATTACH]32166[/ATTACH]
In the second I have made a new layer of the lightest tones (I may have included 2 levels), then turned that off to show the separation.
I mad this cutout layer using new layer via cut, but if I suggest just use ctl/cmd + J, so you can blend the edges. Sometimes you'll get lost pixels in the cut process. And yes, I know, my selection is imperfect, lol.
Let me know if this answers your question or you have further.
