SMT FLC CONFUSES ALT CLRNC AND ALTIMETER SETTING; ALTDEV.

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OUR FLT RTING WAS TO FLY DIRECT DRYER (VOR); DIRECT JUNKR (INTXN); AND THEN THE JUNKR ARR INTO WILLOW RUN ARPT (YIP). WE WERE TOLD TO CROSS 10 MI S OR DRYER AT FLT LEVEL 240; WHICH WE DID. WE WERE THEN GIVEN FURTHER CLRNC TO WHAT WE BELIEVED WAS 13000 FT; AND AN ALTIMETER OF 30.13. I DIALED 13000 FT INTO THE ALT ALERTER; AND A DSCNT; WAS STARTED. THIS IS WHERE THE PROB ARISES. APPARENTLY WE WERE ONLY CLRED TO 17000 FT. DURING OUR DSCNT; WE WERE TOLD THAT WE HAD FALCON TFC OFF TO OUR R SIDE AND LOWER; AND ONCE WE CLRED THAT TFC WE WOULD BE GIVEN A LOWER ALT. I CALLED THE FALCON TFC IN SIGHT AS WE DSNDED TO 13000. WE LEVELED OFF AT 13000 AND PROCEEDED TO JUNKR. THE CTLR THEN ASKED US OUR ASSIGNED ALT; AND I REPLIED BACK TO HIM 13000. (AT THAT TIME HE NEVER SAID ANYTHING ABOUT US BEING AT THE WRONG ASSIGNED ALT; OR THAT WE EVER HAD AN ALT CONFLICT WITH ANOTHER ACFT.) . HE THEN GAVE US FURTHER CLRNC TO 10000 FT; AND WE COMPLIED WITH THAT CLRNC. IT WASN'T UNTIL A CTLR LATER IN OUR FLT INFORMED US TO CALL ZOB WHEN WE GOT ON THE GND; THAT WE WERE EVEN AWARE THERE MAY HAVE BEEN A PROB. HUMAN CONSIDERATIONS: CREW: I BELIEVE THE PROB OCCURRED WHEN I READ BACK THE ASSIGNED ALT. I CONFUSED THE ALT WITH THE ALTIMETER READING. THE ALTIMETER READBACK WAS 30.13 AND I THEN DIALED IN 13000 IN THE ALT ALERTER; INSTEAD OF 17000. BOTH MYSELF AND MY FO BOTH AGREED AND BELIEVED 13000 WAS OUR ALT. CTLR: WHEN I HAD DSNDED THROUGH MY ALT; I WOULD HAVE LIKED THE CTLR TO BRING IT TO MY ATTN; IN THE INTEREST OF SAFETY FOR MY CREW AND OTHER ACFT.