Yes the live crown ratio is crown length (the vertical part) to total tree height (
http://dictionaryofforestry.org/dict/term/live_crown_ratio). The live crown is: "of a standing tree the vertical distance from the tip of the leader to the base of the crown, measured to the lowest live whorl (upper crown length) or to the lowest live branch, excluding epicormics (lower crown length) or to a point halfway between (mean crown length) - {from
http://dictionaryofforestry.org/dict/term/crown_length_(live_crown) }
So, you have it correct the way you described your math! So, in a ten foot tall black walnut tree, you'd measure from the tip of the leader way up high down to the lowest live branch (you're talking about the original branches as the tree was developing). Epicormic branches are a shoot arising spontaneously from an adventitious or dormant bud on the stem of a woody plant often following exposure to increased light levels or fire so disregard them in measuring the live crown ratio. If after measuring your ten foot tall tree (down to the lowest live branch) you found you had 8 feet of live crown, your live crown ratio would be 8 / 10 *100 = 80 percent. As a rule of thumb you could safely remove the lowest 20% which would be from the lowest live branch up 2ft. along the stem.
As a general rule of thumb I think you'd be safe doing it this way. I think pruning works best in younger trees. If you had a 100 foot tree, chances are the lower branches would be getting pretty large and even with pruning along the "veneer" part of the tree, the quality of the butt log would be in pretty poor shape. Although if you DID prune the lowest 20% of the 100 foot tree, I don't think it would be enough stress to kill the tree. However, if you are growing a black walnut / black cherry plantation starting with young seedlings, you have the best opportunity to influence the tree's straightness and quality of form.
Here's a PDF about "Managing Stand Quality" It discusses pruning and Live Crown Ratio more in depth.
Here may be some helpful links for you (you may have already seen them but I like them):
Corrective Pruning Of Black Walnut:
http://www.extension.purdue.edu/extmedia/FNR/FNR-76.html
Black Walnut Plantation Management:
http://www.extension.purdue.edu/extmedia/FNR/FNR-119.html
Black Walnut Management Slides:
http://www.extension.umn.edu/distribution/naturalresources/DD6713.html
Growing Black Walnut:
http://www.extension.umn.edu/distribution/naturalresources/dd0505.html