CPSIrwin, I agree with Gary that the small "violation" of the insertion limit is not an issue, especially if you are not a harsh user. I've used several Technomic Deluxes inserted that same way, and with zero creaking noises or slippages. I wouldn't worry about the exposed vertical length.
I'm a little confused, and didn't really get any less confused in the later posts. You want to raise your handlebars to sit right relative to your saddle. Because of your small bike frame, you can't raise this stem. Inserting the stem is impossible due to the internal butting or spiral (for a Columbus steer tube), so the stem is now where it can be. The rise of around 11 cm is correct for a Nitto Tech Deluxe, and you are stuck with that rise for that stem and that frame. I have similarly small frames (52 and 53 cm) and believe me, you're stuck.
The comment about steering moment or turning moment is not relevant to the vertical extension, assuming normal handlebar forces and a reasonably rigid quill. With a Nitto you can be assured of that, they're really well-made. The turning moment is significant in the other element of the stem, the extension. This is the length of the part that goes forward connecting the handlebar clamp to the top of the quill. Its length is called the "extension" of the stem. It's basically center to center, in centimeters.
Regarding one of the other comments, I don't think any stems with cone wedges and the kind of quill length you need are made, or perhaps ever were made.
You CAN raise your handlebars. You need either a Technomic stem (more about this later) with the same extension as you now have, or a different design of stem. The Tech Deluxe, the Technomic, and most "road" stems have a 73 degree angle between the extension and the quill. You can get stems that have a different angle, all the way up to 90 degrees (right angle). The trick with these is to do the math and determine what combinations of quill length, extension, and angle will raise your handlebars to where you want them with the correct effective extension.
Back to the Technomic: the overall length of the Tech Deluxe quill is 18 cm, with 11 cm above the insertion line. For the Technomic its a LOT taller, 22 cm overall and 17 cm above the insertion line. The insertion area is the same as for the Tech Deluxe, so it also cannot be adjusted once installed. If you need to go 6 cm higher than the Tech Deluxe will allow, then the Technomic is what you need.
This will function, but I have tried it, and I think it looks really ugly, what I call the giraffe effect.
I think my need for a Tech Deluxe implies I am riding frames that are too small, and I want to try a French fit with a 54 or 55 cm c-c frame. This should allow me to use a standard short road stem. If you need a Technomic to fit your handlebars, I think you have a greatly undersized frame, and you just might not be able to be happy on a vintage frame with a horizontal top tube - you might have to to the dark (sloped top tube) side.
Road Fan