That is, no oxygen, no above 10,000. (As I read it. Stand to be corrected)
Your reading is correct for normal circumstances: To takeoff, you must have the appropriate amount of fuel and oxygen loaded. However, FAR 121.329 and .333 do not specifically address the failure of the primary crew oxygen system ONLY. The FAA approved FHB/QRH/Abnormal procedures take over at the point of a system failure.
The OP addressed ONLY a failure of the primary crew O2 (or O2 indication). There has been NO depressurization or indication that one should be expected. Our procedure states:
When the fixed oxygen supply becomes depleted during flight, the crew becomes vulnerable to both smoke
and loss of cabin pressurization.
The following steps should be accomplished to provide the greatest margin of safety under the circumstances:
• Place the cockpit portable oxygen bottle in a location readily available to the Captain.
• Retrieve the two Upper Deck Portable Oxygen Bottles and place one in a location readily available to the First Officer and the other in a location readily available to the Flight Engineer.
• Plan to land at the nearest suitable airport.
• Analyze the possibility of descending to a lower altitude, considering available fuel vs. time to destination. Descent should be a secondary consideration to maintaining adequate fuel reserve, particularly on overwater flights or when traversing widespread areas of poor terminal weather.
• Review the Cockpit Fire/Smoke Evacuation and Rapid Descent Checklists.
Note that the nearest "suitable" airport may NOT be the nearest airport at which an "immediate landing" might be made. It would more likely be the ETP airport or another designated enroute airport where weather is suitable and maintenance is available.
Note also that descent is specifically a "secondary consideration." There is NO reason to create another (i.e., low fuel) emergency while attempting to mitigate a _potential_ problem.