About to start hanging sheetrock in my living room ... House was built in 1968. The sheetrock is replacing wood paneling. Crown molding will be installed.

Given the age of the house its no surprise to me that the ceiling is not completely level nor even (there are high/low spots such that my 4 foot level rocks when pushed up against the ceiling) -- these conditions beg, in my mind at least, questions of how that will impact my measurements for cut outs for doors, electrical boxes, etc. should I just hang the sheets level and address any gaps at the wall to ceiling junction during finishing? If so, what's the best way to establish that line as a reference for measuring for cuts.

Most of what I've read/seen has indicated that the wall panels should butt up against the ceiling panels. There are some gaps between the existing sheetrock ceiling panels and the adjacent wall framing- some gaps are over 1/2" so the drywall can't butt against the ceiling panel - I could probably butt whole sheets against the joist in some areas.

Thanks for any input on how to best approach these conditions I'm ready to get this stuff hung!

Grady