Michael, I have a neat idea you could add to your list if you like:

If, when processing the curve-ends and poly's through the video card - you could perhaps take the portion of the line that is visible through the surface with the one that is submerged and make the difference a little portion that is grayed out.
Or, maybe the line end doesn't know when it's not supposed to be there... eh.

That way, whether it is there or not, it is most likely going to be more intuitive to understand when looking at it.