Well, you sort of answered your own question.
The ones that are so low that they get covered with mud is an obvious problem. You've got to get them out of the mud.
From an operational stand-point, the heads can't be too high. Your real concern on too high is making sure they are low enough that you don't chop them up with the lawn mower (think early season mowing with the mower on the lowest setting) or trip over them walking through the yard. Beyond that, the maximum height is going to vary. I made the mistake of setting all of might to the same height. The ones in the middle of the yard are perfect. But the ones near the edge... well I've already cut a few of them because my lawn mower blade was lower at the edge when I have half the wheels in the grass and half the wheels on pavement (drive way, side walk, etc) that is lower than the lawn.