ALT DEVIATION; OVERSHOOT. ACFT EQUIPMENT PROBLEM.

Narrative

PIC WAS ON THE #2 COM WITH COMPANY DISPATCH WHILE SIC (RPTR) WAS FLYING AND HANDLING ATC COMS ON THE #1 COM. CENTER CTLR REQUESTED LAT/LONG COORDINATES OF OUR DEST ARPT. SIC CALLED UP DATA ON THE LORAN AND RESPONDED WITH COORDINATE DATA TO CTLR. APPROX 1 1/2-2 MINS LATER; CENTER CTLR ADVISED; 'YOU WERE CLRED TO FL310; I SHOW YOU AT FL334; DSND AND MAINTAIN FL310.' WITH SIC STILL FLYING; AN IMMEDIATE DSCNT WAS BEGUN TO FL310. AT APPROX TIME OF REACHING FL310; CENTER AGAIN ADVISED OF OUR ALT DEVIATION AND AGAIN INSTRUCTED US TO RETURN TO FL310. AT THIS TIME; WITH THE ACFT LEVEL AT OR NEAR FL310; SIC RESPONDED WITH THE PHRASE TO ATC; SMT. CENTER CTLR THEN INSTRUCTED SMT TO CONTACT ZID. THE ACFT'S ALT ALERT SYS DID NOT RPT AT ANY TIME DURING THIS SEGMENT OF FLT WITH EITHER AN AUDIO OR VISUAL INDICATION; EVEN THOUGHT IT HAD BEEN PROPERLY SET TO FL310. IT IS EASY AND ROUTINE TO RELY ON EQUIP TO WORK AS IT SHOULD. IN THIS CASE; THE ALT ALERTER WITH 2 LIGHTS AND AN AUDIO TONE FOR REMINDER. EQUIP WHICH WE RELY ON ROUTINELY FOR HUNDREDS OR THOUSANDS OF TIMES CAN AND DOES FAIL. UNFORTUNATELY; IN OUR CASE; THIS FAILURE OCCURRED WHILE BOTH CREWMEMBERS WERE SEPARATELY DISTRACTED WITH OTHER THINGS AND NOT WATCHING CLOSELY ENOUGH THE FLT'S PROGRESS. IN THE FUTURE; WE WILL KEEP NONFLYING ACTIVITIES; SUCH AS CONTACT ON COMPANY FREQ; TO AN ABSOLUTE MINIMUM UNTIL A LESS 'CRITICAL PHASE OF FLT' IS ATTAINED; I.E.; CRUISE FLT WHERE ALT CHANGES OF DEVIATIONS ARE UNLIKELY. BETTER COCKPIT MGMNT AND CREW COORD.