You bring up some good points. It is a rear discharge model and I noticed that they have short sections of chain to keep stuff from getting launched out the rear. I'm sure I could lengthen those as well as rig something up for the side.I suspect that the reason that the quality of the cut diminishes at higher cutting heights is due to the fact that the deck is designed to create a lifting action on the grass and when the higher setting upsets this the grass can actually get blown down away from the cutting blades. Hopefully someone with more knowledge of this will be able to confirm or debunk this theory.
There are a couple of things that I can think of that you may want to consider besides a potentially poor quality of cut. The first is shielding from grass and objects thrown from under the deck. When run close to the ground the deck tends to keep projectiles from getting out from under it. The higher the deck is the more chance there would be to throw something. Second, how will the higher position affect the angles of the PTO shaft? While a PTO shaft is capable of turning in a relatively wide arc, the loads, the wear and the vibration will increase significantly as the running angles increase.
As for the PTO shaft it shouldn't be a problem. Right now it slopes down from my tractor (JD 2305). My proposed modification would actually bring it more level.