I'm keen to play Oblivion as close to vanilla as possible but I'd still like to fix the old 'bandits wearing Daedric' problem. It's just that I've tried most of the overhauls and they all add extra content that I never really liked, has anyone ever made a pure level scaling fix?

Here are two mods you could take a look at. They both add some new stuff, but they're not overhauls. I've used G's mod in many games over the years and like it a lot. I always use the "unscaled" version.

http://www.nexusmods.com/oblivion/mods/45534/? by TheInquisitor

http://www.nexusmods.com/oblivion/mods/3321/? by gq13kid