Yes adding more LODs will work but once zoom in past the lowest Cache level that esri has then the esri basemaps will not draw and you need to turn on your own data to fill in the gap.
Here is how I have mine configured (Notice the display levels on the esri streets, this tells the map to draw that layer for those display levels only, and then I have a min and max scale set to turn on and off my aerial photography layer:
<map wraparound180="false" initialextent="-9598200 3968200 -9500400 4026200" fullextent="-9598200 3968200 -9500400 4026200" top="40" attributionvisible="false">
<lods>
<lod resolution="0.14929107085026672" scale="564.2485881"/>
<lod resolution="0.29858214164761665" scale="1128.497176"/>
<lod resolution="0.5971642835598172" scale="2256.994353"/>
<lod resolution="1.1943285668550503" scale="4513.988705"/>
<lod resolution="2.388657133974685" scale="9027.977411"/>
<lod resolution="4.77731426794937" scale="18055.954822"/>
<lod resolution="9.554628535634155" scale="36111.909643"/>
<lod resolution="19.10925707126831" scale="72223.819286"/>
<lod resolution="38.21851414253662" scale="144447.638572"/>
<lod resolution="76.43702828507324" scale="288895.277144"/>
</lods>
<basemaps>
<layer label="ESRI Streets" type="tiled" visible="true"
url="http://services.arcgisonline.com/ArcGIS/rest/services/World_Street_Map/MapServer"
displaylevels="11,12,13,14,15"/>
<layer label="Aerial Photography" type="tiled" visible="true"
url="http://myserverstuff/MapServer"
maxscale="564.2485881" minscale="9027.977411"/>
<layer label="Parcel Data" type="dynamic" imageformat="png32" visible="true" useamf="true"
url="http://myserverstuff/MapServer"/>
</basemaps>
<operationallayers/>
</map>
