We're gonna have to stop this 'editing' confusion

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Did you try a headtest with restriction in the line?, put a really restrictive block and rad in the line after the Y, then try the 'pinch tests' and see how high the fountain is

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Then when you try it in a 'closed loop' just watch for cavitation, if it's getting enough water pressure it'll be OK. I think it will as the output is pushing back into the inlet(I've heard it said it's better than submersed for flow because of this), as long as backpressure does'nt bugger things up...
Good luck dude!...