Are you running OS X or Windows?

The fps drops are more than likely caused from the new skins in the gun mettle update. The OS X version of TF2 is locked at dx9 because it uses a DirectX 9 compatible interface for OpenGL. So what ever -dxlevel you use won't actually change anything on the OS X version.

Another fix that works on Windows is mat_picmip -1, but Valve changed it on the OS X version in a recent patch so it won't go lower than 1, because lower values were causing crashes.

I highly recommend boot camping Windows if you're not already, since Valve is known for breaking the OS X version of TF2 and taking forever to fix it.

Are you on a Mac? If so, this is probably caused by the font "fix" for Mac clients in the Oct. 20 update. A few other Mac users on the Steam forums also have this problem: http://forums.steampowered.com/forums/showthread.php?t=3264884