If you ONLY care about Lobotomizers, and not about score or electrum, you can Lvl3 but quit against any level 3 without a lobotomizer. There is only one Lvl3 with a Lobotomizer, a water/aether deck with a water mark. http://elementswiki.co.cc/pve/random-normal-and-elder/ai-level-3-elder/ (http://elementswiki.co.cc/pve/random-normal-and-elder/ai-level-3-elder/)
I know RootRanger knows this, so I'll just make a general note of it: the Elders have changed, it's now the monoaether Elder that has these. Two of them. Unfortunately this is also the toughest Elder. x)
Anyway, yes, this is the card that reduces the Fake Gods Osiris, Paradox and Fire Queen to mewling kittens, and weakens a ton of other FG's including Dream Catcher, Graviton and Morte. It's no wonder a lot of people pack Mind Flayer in their stallbows.
In fact, I'll let you in on a little secret regarding Dream Catcher... if you Lobotomize a creature, whether it has an ability or not, that creature will have summoning sickness the next turn. What this means is that once DC casts Butterfly Effect on the first Micro Abomination he's played, that Micro won't be able to use BE. Then you just Lobo it again. Just make sure you do Lobo the first Micro in the sequence, because he'll always cast BE on that. Might seem dirty to exploit the mechanics like that, but considering how hard DC is for most decks, I think he deserves it.
I actually got Osiris as predicted FG today. Made a Quinted Animated Electrocutor deck with Phase Shields and kicked his ass, as if it wasn't enough that RoL/Hope eats him for breakfast. Poor punching bag. I'll pack more SoG's than Shields the next time I try it, though.. dangerous Trebuchets.