The baffles are up against the roof sheathing, not
the ceiling. If you do the geometry, before they get
to the beginning of the ceiling sheetrock they have
many inches of clearance for insulation. They are
routinely used that way with no problems. It's
precisely what they are designed for.


At the top of my wall I have 3 1/2 inches of height between my roof sheeting
and my wall to provice circulation from my soffits area to my attic. The
baffle is going to use half of that height leaving room for a tiny amount of
insulation.


Might be better to install roof vents just
above the insulation at the bottom of the roof and again at the top. When
you have continuous venting at the soffit and ridge the venting can be
reduced by 50%.

Reduced 50%? As compared to what? With continuous
venting you almost always wind up with more venting
area. And even if you had venting area with continuous
vents that was just equal to that of box vents, why would
it be reduced by 50%?

The mandatory minimum attic ventilation area is 1/150 of the area of the
space ventilated for all enclosed attics or rafter spaces. This minimum can
be decreased to 1/300 if either (i) at least 50% and not more than 80% of
the required ventilation is at least 3 feet above eave or cornice vents with
the balance of the required ventilation provided by eave or cornice vents or
(ii) a Class I or II vapor barrier is installed on the warm-in-winter side
of the ceiling.