I believe the damage cap was (Level-1)*60. That was tweaked for level 6 and 7 (presumably 8 as well) because of the limited defense available.
Edit: I recall there being a calculation for damage cap, but apparently (L-1)*60 isn't it... Anyway... Here's what we DO know for sure:
http://galaxylegion.com/wiki/index.php/Damage_Caps
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[20:40] Wredz: just hacked a massive extremely rich minting planet from someone.. thats the best planet i ever hacked
[20:43] DarthFlagitious: is it spearmint or peppermint?