Are aircraft able to go beyond their service ceiling by this much
Well, the C208 doesn't have a pressurised cabin and from my understanding, service ceiling is the max figure at which the airplane can hold a survivable environment. So in an unpressurised airplane, service ceiling is merely based on performance. But then again, you mis-read the altitude by some 9000ft
The instrument panel has at least two inoperative equipment indicators, leading to my other suspicion that this could just be a poorly maintained plane.
I'm not particularly familiar with the Caravan but one of the inop things is the electric trim, no biggie there. The one to the right of the altimeter seems to be the FMA; I would expect this thing to have no autopilot. And on the radio stack I see another two labels; one of them appears to be a KLN90B GPS (or a similar one, at least) and below it, looks to me like it's the ADF. Fair enough for a skydiving aircraft, methinks.