So I would suggest this procedure:

 

For a lower cruise altitude, reset the MCP then reset the cruise.

 

 

The PMDG is a VNAV ALT plane. Take a look at the FCOM for how that's handled. I would suggest using the ALT INT button on the MCP rather than LVL CHG, if that fits your scenario. VNAV ALT is still VNAV, but I forget how it transitions to VNAV PATH.

 

It depends on where you are in relation to the path.  Climbing is easy, set the higher altitude in the MCP and press the ALT/INV button.  It will change from VNAV ALT to VNAV SPD until you reach the cruise altitude set in the FMC, where it will change to VNAV PATH.

 

Descending is trickier.  If you are above the path in VNAV ALT setting a lower altitude will put you in VNAV SPD with idle thrust and it will either revert to VNAV PATH upon intercepting the path from above or level off in VNAV ALT if it reaches the MCP altitude prior to intercepting the path.  If you are below the path and set a lower altitude in the MCP and push the ALT/INV button it will stay in VNAV PATH.  What happens then depends on if the MCP speed window is open or not.  If the speed window is closed the airplane will descend at 1000' FPM until intercepting the path and descend on the path at idle thrust.  If the speed window is open it will go into VNAV SPD and the A/T retards to idle.  With the speed window open it behaves just like level change.

 

Clear as mud.