In our baby's room we had a similar problem. The idea there is to make the room so dark she doesn't wake up at dawn in the summer
I started with a blackout blind, not very satisfactory due to light spill over the top and at the sides.
Then we added curtains, and then lined curtains - still a lot of spill around the edge.
Then a pelmet on the top (surprisingly effective)
Finally I fitted strips of wood to the outer edge of the recess and another that overlaps the blind at the front so the blind runs in a groove 'behind' them. Hard to explain, but you can't see the edge of the blind at all and it's held flush against the recess. The channels stop just above the bottom of the pelmet so the fabric can run up onto the roller and I put felt pads on the top to stop the fabric snagging.
All that said in my lounge we have 3/4 length victorian shutters and no curtains with a street light 10 feet outside the front window. The PJ screen is on the opposite side of the room and as long as you wait until after sunset the amount of light cast into the room is small and the picture is fine. Probably something to do with the light being so close and high up.
Before you go to heroic lengths to black out the room I would test it out with your PJ and screen - you may not need to do more than you have done already - depending on how bright your PJ.
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