Question is what to do with players who have legitimate reason to believe that they are significantly better than where the league thinks they belong, and how to determine what is their true competitive level.
You have a lot of latitude to set your first level you play at. You are supposed to play a "verifier" to make sure that you are at the right level but if you can't make the schedule work then I believe you can just sign up wherever you wish. In order to try and stop people from self rating at the bottom of their level then they ahve a rule where if your rating is too high then you are ineligible for playoffs.
If the OP were playing Ultimate tennis for the first time then he could rate at 3.5 with no problems. Because he has already played in the league then the system is set up such that he would have to have a more dominant season in order to move up rather than just telling them that he improved over the winter.