I also have this problem. I think that there is a bug in the crafting system. If you look at the info from the crafting HUD for silks, you will notice that the level is 0 whereas most all of the other items are from 1 to 5.
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GM Crafting Hud v1.0.3: Item name: Slave silks
Item level: 0
Raw material: No
I think that when you are ready to advance, the system looks at the level of what you made and increments it to determine your next level. So it is trying to "advance" us to level one.
I would be extremely grateful if someone would fix this.