Hi Nick,
No, it does not sound right for your Z51.
The first thing is that 10 quarts is too much.
The second thing is that for your dry sump, less oil is better than too much oil. The whole point of the tank on the dry sump is to keep oil available to pick up even in hard cornering. So, even if you are low of oil with the dry sump, you will be able to pick up oil in the tank.
Why is it such a big deal to NEVER overfill the tank? An overfill condition can result in oil going from the tank to the air intake. That can cause a whole mess of issues from a soaked air box and filter, leaking out all over the place, could coat the MAF sensor if it goes that far, and, heaven forbid, if enough of the oil ever got down past your intake valves into your cylinder, well, fluid is essentially incompressible... Bye bye engine...
This brings me to point #3: leave your oil closer to the bottom of the hash marks than the top of the hash marks. It is safer that way.
As for how to check the oil, do what is indicated by GM: make sure the oil is hot (hotter than the indicated temperature - I make sure it is even hotter than the minimum required temperature), turn the car off, and wait five minutes to check it. If you wait too long, the reading will be too low, and you might overfill it (which is absolutely what you want to avoid).
There are a ton of threads here on the forum for this.
During the pre-delivery inspection on my car, I found that the oil was overfilled from the factory (slightly over the top of the hash marks). I made the PDI guy suction enough out that I was below the middle of the hash marks. He said, "I would rather have it too high than too low." I said, "No, it absolutely will not be that way. Take more out, and don't stop until I say it is okay." He, of course, complied.