XDocument xdoc = XDocument.Load("data.xml");
var lv1s = xdoc.Root.Descendants("level1");
var lvs = lv1s.SelectMany(l=>
new string[]{ l.Attribute("name").Value }
.Union(
l.Descendants("level2")
.Select(l2=>" " + l2.Attribute("name").Value)
)
);
foreach (var lv in lvs)
{
result.AppendLine(lv);
}
Ps. You have to use .Root on any of these versions.