Is it possible to set up a gradle project with more than 2 levels?

I would simply put the following in TopProject/settings.gradle:

include 'Project1:SubProject1'
include 'Project1:SubProject2'
include 'Project2:SubProject1'
...

The only change required to the projects you currently have is to remove settings.gradle files from them as you can only have one setting.gradle file per project structure.