Big Pistons,
Here are a couple of extracts from the CAP 413 CAA Radio Telephony Manual.
1.4.2 Pilots are urged – in their own interests – to request assistance from the emergency service as soon as there is any doubt about the safe conduct of their flight. Even then, the provision of assistance may be delayed if a pilot does not pass clear details of his difficulties and requirements, using the international standard RTF prefix ‘MAYDAY, MAYDAY, MAYDAY' or ‘PAN PAN, PAN PAN, PAN PAN' as appropriate. For example, a vague request from a pilot for ‘confirmation of position' is unlikely to be accorded as much priority as would be given to a statement that he is lost. If, subsequent to the transmission of a ‘MAYDAY' or ‘PAN', a pilot considers the problem not to be as serious as first thought and priority attention is no longer required, the emergency condition may be cancelled at the pilot's discretion. It is invariably preferable for pilots believing themselves to be facing emergency situations to declare them as early as possible and then cancel later if they decide the situation allows.
1.4.3 If a pilot is already in communication with a civil or military ATSU, before the emergency arises, assistance should be requested from the controller on the frequency in use. In this case, any SSR code setting previously assigned by ATC (other than the Conspicuity Code 7000) should be retained until instructions are received to change the code setting.
1.4.4 If, however, the pilot is not in direct communication with an ATSU and the aircraft is equipped with an SSR transponder it should be switched, preferably before the emergency call is made, to Emergency Code 7700, with Mode C if available. If the transponding aircraft is high enough to be within secondary radar cover, the selection of the Emergency 7700 Code will alert the Emergency Controller to the presence of an incident by means of an audio and visual warning. The received SSR plot will show the precise location of the aircraft on the controller's radar display, and will then obviate the need for the emergency controller to carry out the more time-consuming manual aircraft position plotting procedure. Information on SSR operating procedures, including Special Purpose Codes 7700 (Emergency), 7600 (Radio Failure) and 7500 (Hijack or Other Act of Violence) are detailed in the ENR Section of the UK AIP.
1.4.6 Following the initial distress or urgency message, it is permissible for pilots and controllers to use 'MAYDAY' and 'PAN' as a callsign prefix at their discretion, where it is judged that this would have a beneficial effect on the outcome.
Sorry for the long post. Hope it helps though. I agree "three and a half thousand" is very non standard. They should have paid closer attention to the manual.
Jazzy