Has anyone every started this adventure path for higher level characters? Is it still fun?
I would not give them anything higher than level 2. I think a better option is to give double the class hit points at 1st level and then add the con bonus. This makes the adventure reasonable(not really, but they do have a chance now).
I started my group around level 2. I had no choice, as one of the players runs a lizardfolk with a level adjustment of +1, so to keep everyone level, I started the lizardfolk at level 1 and everyone else at level 2.
I also ran another module before introducing Whispering Cairn, so the group was around level 3 when they entered the cairn.
Start them at level 10 if you want. Starting them at the Whispering Cairn will require big adjustments, of course, but you might also consider starting the campaign anywhere in the midst of the Age of Worms. Start them at the Champion's Belt games and let them take up the path at that point. Surely any gladiator team could stumble upon Bozal and find evidence of the Age of Worms for the first time. That could take place at any level with any of the modules, really. I actually think it's much more realistic for a group to sort of "inherit" the Age of Worms quest from another group of adventurers who perished in their pursuits. I think that might add an additional level of drama to the campaign, knowing that another group met their end in their search for answers.
Start them at whatever level you're comfortable with, and make those adjustments as needed.
I ran my players through this after Return to the Temple of Elemental Evil (for levels 4-14). The first adventure my players did was the Prince of Redhand. They've enjoyed it so far (we're on the second to last adventure). I think some of the things in the early adventures end up being red herrings (Ebon Triad). Other things from the early adventures meant less to me because I'm running it in the Forgotten Realms (e.g., Wind Dukes). So for me it's worked out okay.
My group all had 4th level PC's when we started this AP with Chapter 1: The Whispering Cairn back in early February of 2006 - we had played through several other adventures starting from 1st level before I decided to morph my campaign made up of randomly strung-together Dungeon adventures into an Age of Worms campaign. I had to make extensive use of Scaling the Adventure sidebars up until they began the Champion's Belt adventure (part 5), when the level of the adventures had finally caught up to the average party level. By the time that adventure was done, the PC's were all ahead of the adventures again - ie. they had been almost ready to level-up when they began CB.
We've had lots of fun so far, though having to advance so many monsters has been a bit of a pain at times. I mean, it's always fun to tweak things a bit just because you want to, but when you pretty much have to, just for the adventure to present a decent challenge, it can get old quick. Especially if you don't have a whole lot of free time to begin with, and wind up having to give up precious hours that would otherwise be spent painting BBEG miniatures for the encounter at the adventure's climax or something just in order to get it all done. We're now gearing up to begin the next adventure - A Gathering of Winds - sometime in the next few weeks after the guy who plays our rogue's wife gives birth, when we can be sure to have the whole group together with no missing players for at least a couple sessions in a row, so I suppose I really should be getting on with checking that sidebar and retyping some pumped-up stat blocks... Yeah, I know, we are taking forever to get through this campaign, but it's not as bad as it may sound - we alternate between this campaign and the group's other DM's FR campaign every time we complete an adventure, so at least half of that time we were playing a different game, plus I'm pretty sure there have been at least a few times when the other DM actually waited until we had played through 2 or even 3 adventures in his campaign before we switched back to my campaign, for instance when I was too busy with new babies around the house to prepare for DMing multiple sessions...
Anyhow, the point is, even though our group started the AP a fair number of levels higher than intended, and even though that has made a lot of extra work for me, I'd say it's been worth it so far - there are some great adventures in this path!