Rereading Sinai and Zion

I'm reading Jon Levenson's Sinai and Zion right now. It's been years since I've read it, and this reading is different from my previous readings. In my previous readings, I had a hard time understanding Levenson's argument, plus I could not see his theological biases, which others around me were claiming to identify. In my mind, I was just reading dry and detached scholarship---which came as a shock to me when I took his classes and found him to be a funny, animated lecturer, with a sensitivity to the religious aspects of Judaism! In my current reading, however, his prose is a lot clearer and much more engaging to me, and some of his writing sounds like preaching, even though his approach to the Hebrew Bible is far from fundamentalist. (He acknowledges the diversity of the biblical writings, says that theological meaning was attached to events rather than intrinsic to them, highlights the viewpoint in the Hebrew Bible that there was more than one god, etc.)

I've seen this most in his section on Sinai. Levenson interprets the Sinai covenant in light of second millennium B.C.E. Hittite treaties, in which people swore allegiance to a Lord, and were thus forbidden to serve other lords. This is why the Sinai covenant emphasizes that Israel must serve the LORD alone---it's not because the other gods do not exist, but rather because she is bound to the LORD. Moreover, while Levenson does not hold that Moses wrote the entire Pentateuch, he does believe that there is an important principle in the ascription of the Pentateuch to Moses: it makes obedience to the Torah a matter of serving a personal God, who revealed his will for Israel to Moses, rather than one of submission to a mere set of rules. Therefore, Israelites cannot pick and choose what laws they will observe, for they are not bound to an abstract rationality, but rather to their God, with whom each and every Israelite is in a covenant that he must continually affirm. That means that Israelites must trust God enough to obey God's rules, even the ones that make no apparent sense.

Levenson does not appear to be as homiletical in his section on Zion, at least not so far. But I'm struggling somewhat to understand his argument. Levenson cites Isaiah 14:12-15, which presents the assembly of the gods as occurring on the top of Mount Zaphon, which, in Psalm 48:3, refers to Mount Zion. But the assembly of the gods was not on Zion, right?

Sure, there was a temple there that housed God's presence. Even after the temple was destroyed, there was a belief that God still dwelt on Zion (according to Levenson), for prayers were directed by Jewish exiles in the direction of the holy mountain (I Kings 8:28-29; Daniel 6:11). There may have been a belief that Zion was special, even by those who lived there before David took it over, for, as Levenson notes, the Jebusites in II Samuel 5:6-7 view Jerusalem as impenetrable---which could be because they thought that it had divine protection (pages 93-94). But Zion was not literally heaven---a place where the gods met, as Mount Olympus was to some Greeks. Granted, the temple was a symbol of the cosmos, as Levenson argues, and what's interesting in Isaiah 6 (according to Levenson) is that the temple comes alive---it actually transforms into the heavenly reality to which it points, as Isaiah sees not only statues and representations of angels, but real ones. But Zion was not literally heaven, for buildings were there---whether they were standing or (after the destruction of Jerusalem) in ruins.

So I'm slightly confused on this point.