Evaluate in emacs -Q
(let (pt pt2 ws ov)
(insert "Lorem ipsum dolor sit amet.")
(setq pt (point))
(insert "Consectetuer adipiscing elit." "\n")
(setq ws (point))
(insert "Phasellus lacus." "\n")
(insert "Cum sociis natoque penatibus et magnis dis.")
(setq pt2 (point))
(insert "\n")
(insert "Parturient montes, nascetur ridiculus mus." "\n")
(insert "Nullam eu ante vel est convallis dignissim." "\n")
(set-window-start nil ws)
(setq ov (make-overlay pt pt2))
(overlay-put ov 'display "..."))
It will appear as though the overlay is at the beginning of the line, even though it's not.
Evgeni