Lvling wont help you.
Meph can drop weap78 Conquest Sword,Champion Sword,Scourge,Seraph Rod,Crusader Bow,Winged Knife,Grand Matron Bow,Feral Claws) and armor78(Balrog Skin,Hellforge Plate,Troll Nest,Crusader Gauntlets,Earth Spirit,). He can also drop up to cham, but chances of that are *REALLY* low.
They may have increased Mephs TC from 78, I do a lot of Flayer Dungeon runs and I know from experience the monsters there (the mlvl for most of the monsters there are 79 and 80) can drop up to TC 81, Spired Helm, Cryptic Sword (I think thats TC 81) and other things have dropped there often enough. It may be possible the monsters that dropped these were champs or mini-bosses, but Meph can probably drop as high as these guys, unless Blizz increased areas (ala The Pit) in Flayer Jungle as well. I've never seen anything from TC 84 drop in Flayer, I think TC 81 is the max.
Meph's TC is unchanged, however his level (87) means that he can drop any Unique or Set items that fall within his TCs.
Amusingly, any random (ie. non-Council) monsters in the Durance can drop better than Meph, up to TC 87... but they'll only be level 83 (85 Champs, 86 bosses) so can't quite drop everything, Unique-wise.