You're right - I was looking at the wrong column in my standard atmosphere table - looked at viscosity - what good is that? Density at 10000 ft is 74% of SL, giving total power as 1.15*.74=0.85HP, giving a shaft power available of 0.7hp, for a 30% loss.

However, RPM's may in fact increase with altitude, as it akes less torque to turn the prop at a given speed in thinner air. If that torque falls off faster than available power, then rpm would have to increase to compensate. I'm not sure of the realtionship or torque to density, however - will have to consult Mr. McCormick.

BTW, for an all-around excellent discussion of basics of aerodynamics, performance, and basic S+C, that's a great book:

Aerodynamics, Aeronautics, and Flight Mechanics, by Barnes W. McCormick.