diff -Naur Vim_orig/vim/src/popupmnu.c Vim_2lines/vim/src/popupmnu.c
--- Vim_orig/vim/src/popupmnu.c	2008-03-29 14:30:59.000000000 +0100
+++ Vim_2lines/vim/src/popupmnu.c	2008-03-29 14:47:27.000000000 +0100
@@ -73,8 +73,13 @@
     validate_cursor_col();
     pum_array = NULL;
 
-    row = curwin->w_cline_row + W_WINROW(curwin);
-    height = curwin->w_cline_height;
+    row = curwin->w_wrow + W_WINROW(curwin);
+
+    /* Leave two lines of context if possible */
+    if (curwin->w_cline_height - curwin->w_wrow >= 3)
+        height = 3;
+    else
+        height = curwin->w_cline_height - curwin->w_wrow;
 
     if (firstwin->w_p_pvw)
 	top_clear = firstwin->w_height;