Will floor leveling compounds work over black mastic that simply is too difficult to remove. I want to use an epoxy garage floor paint after leveling and don't want peeling, cracking and such after paint has been applied.

One of the best products I've found to level floor is a "Henry" product. The big box store carry it. There's quite a few different "henry" products with special applications.

Pay attention to the mixing instructions. If not premixed when it says on the front of the box or tub "Mix with water". Many times it can it also be mixed with "Henry LATICRETE " in place of water which enhances its expansion and contraction capabilities

I couldn't get all the info on these two and I know one of them states it can also go over old adhesives. Its boils down to 2 things. If the substrate is sound and no chemical reactions. The "Henry" product is the thought here.

http://www.toolboxsupply.com/productdetails.aspx?sku=10882889

HENRY 345 Patch n' Level must be covered with a floor covering or by a high-quality floor paint or sealer