For best level, you will need: A stake or pole (2-3 feet in length), a length of rope or similar thickness material (must be thick), level (looks like a sturdy ruler with plastic cylinders containing an amount of liquid)
First, you need to determine your level measurement. To do this, put your stake or pole in the ground at lowest point in the area you are leveling. Then tie a rope or other length around the stake\pole and proceed to stretch it to the HIGHEST point on your land. It is best to place a rock or other heavy object on the rope here. Now, by placing the level on the rope and finding levelness, you can determine at what height your yard is level, depending on how far the rope is from the ground.
So, quick summary.
1. Plunge your stake at the LOWEST point of your dig site.
2. Tie the rope to the stake and stretch it to the HIGHEST point on the land, place it on the ground and anchor it.
3. Use your level on top of the rope and adjust the rope on the stake to find levelness, then height from the ground.
Finally, if you want to get the job done fast, rent a tiller or other high power excavating machine. If you don't mind several (or more) hours of hard, manual labor with a shovel, dig away. If you do decide to put your back into it, consider bringing along some help and a couple more shovels. The job won't take near as long and it's certainly a morale boost to have someone working beside you.