Just trying to clarify what your oil level was....
~Are you saying the oil was 1/8" DOWN from full on the dipstick?
~Or ONLY 1/8" showing at all on the dipstick?
If it was only 1/8" DOWN, then you wouldn't need to add a full quart.
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Regarding the 'engine light', usually it's the egr valve or failing gas cap or one that hasn't been tightened correctly.....ya' know the 'three click' correctly tightened thing. EGR valves are expensive though at around $150+ but they can easily be cleaned right in the good ole' home garage.