I assume we're talking about the Trek 1.2.
I wear pants with a 32" inseam and ride a 60 cm Trek Madone. It seems strange to me that your saddle would be lower than the tops of your handlebars. I just measured mine and the seat is 3 1/2" higher than the tops. I believe they're both H2 fits as far as frame geo. A 4 inch lower seat height seems excessive.