When I add new videos to KM I would like the showlevel field in videometadata table to be set to 4 as a default instead of 1.

Since I have already turned on parental controls, this would ensure that no videos are kid "findable" until I set them to be so by changing their showlevel to 1.

Does anyone know which script gets kicked off to scan the video folder and update the DB with the new video files? I have been searching but haven't been able to find it. If someone can point me at the script I will make my changes to that file and post my how-to back to the forum.

Alternatively is there a setting for this that I have overlooked somewhere?

Besides the binary I see showlevel in find_meta.ph.
You might try backing it up then changing it:

nano +413 /usr/share/mythtv/mythvideo/scripts/find_meta.py