diff --git a/packages/pi-tui/src/overlay-layout.ts b/packages/pi-tui/src/overlay-layout.ts
index d3c2d8b6a..ee614f094 100644
--- a/packages/pi-tui/src/overlay-layout.ts
+++ b/packages/pi-tui/src/overlay-layout.ts
@@ -324,10 +324,12 @@ export function compositeOverlays(
 
 	const viewportStart = Math.max(0, workingHeight - termHeight);
 
-	// Apply backdrop dimming if any visible overlay requests it
+	// Apply backdrop dimming if any visible overlay requests it.
+	// Uses dim + dark gray background (256-color 233) so the overlay pops visually.
 	const hasBackdrop = visibleEntries.some((e) => e.options?.backdrop);
 	if (hasBackdrop) {
-		const dimFn = (text: string) => `\x1b[2m${text}\x1b[22m`;
+		const dimFn = (text: string) =>
+			`\x1b[2m\x1b[38;5;242m\x1b[48;5;233m${text}\x1b[49m\x1b[39m\x1b[22m`;
 		for (let i = viewportStart; i < result.length; i++) {
 			if (!isImageLine(result[i]) && result[i].length > 0) {
 				result[i] = applyBackgroundToLine(result[i], termWidth, dimFn);
diff --git a/src/resources/extensions/gsd/notification-overlay.ts b/src/resources/extensions/gsd/notification-overlay.ts
index 6ab73f729..412e68023 100644
--- a/src/resources/extensions/gsd/notification-overlay.ts
+++ b/src/resources/extensions/gsd/notification-overlay.ts
@@ -157,18 +157,12 @@ export class GSDNotificationOverlay {
     }
 
     const content = this.buildContentLines(width);
-    const viewportHeight = Math.max(5, process.stdout.rows ? process.stdout.rows - 8 : 24);
-    const chromeHeight = 2; // top + bottom border
-    const visibleContentRows = Math.max(1, viewportHeight - chromeHeight);
+    const maxVisibleRows = Math.max(5, process.stdout.rows ? process.stdout.rows - 8 : 24) - 2;
+    const visibleContentRows = Math.min(content.length, maxVisibleRows);
     const maxScroll = Math.max(0, content.length - visibleContentRows);
     this.scrollOffset = Math.min(this.scrollOffset, maxScroll);
     const visibleContent = content.slice(this.scrollOffset, this.scrollOffset + visibleContentRows);
 
-    // Pad to fill viewport so the overlay covers underlying content
-    while (visibleContent.length < visibleContentRows) {
-      visibleContent.push("");
-    }
-
     const lines = this.wrapInBox(visibleContent, width);
 
     this.cachedWidth = width;