There are a bunch of dyno correction factors in use. Some of the newer ones are more realistic. They are more sophisticated about computing friction losses and they are based on standard atmospheric conditions we might experience. Unfortunately, a lot of the info we have available, like on "airdensityonline," are based on the older standard atmosphere used for J607.
My feeling for a long time is that power losses due to increased altitude are more than those predicted by J607 or simply comparing air densities. Air density comparison and similar methods like J607 assume the power loss is directly proportional to the amount of available oxygen. Increasing altitude also lowers the compression ratio and this has a detrimental effect on performance.
Some recent looking around on the i-net dredged up this old study where folks looked at the effects of altitude and engine internal friction and pumping losses. It is at
www.naca.central.cranfield.ac.uk/reports/1929/naca-report-295.pdf They used standard altitude. I am assuming this corresponds to our modern concept of density altitude.
An old study where I know how they worked up the numbers beats a lot of the newer stuff where I do not, is this skeptical old bastid's opinion. Based on a 5,800 foot average density altitude at B'ville durng BUB, the power correction factor is 0.81 using Curve E of the airplane study.
Educated second opinions on all of this are welcome.