I like the idea of building it up and having the steps down to the yard. You don't have to build it all the way up, but try to get it within one step.
If you don't do this, the patio is 18-20 inches lower than the house. If you go ground level, will the ceiling of the patio be at 11 ft or will the patio ceiling look really low from inside the house? One of these has to be true because of the different levels. Just a thought.
Also, have you considered stamped concrete or are you set on pavers?