Badge Distance Penalties

Need some help getting clear on terms, please.
I'm planning a Diamond Distance flight of 326 miles. The starting airfield
is at 300' msl. The finish will be at an airfield elev 1150' msl. If I
take a tow to 2300' msl, notch the baro, climb to 5000' msl and then cross
the start line am I penalized?

The safe and easy answer (I think) is to tow to no higher than 4431' (finish
height + 3281), release behind the start line, notch and cross the start
line, then climb up and start in earnest, but I'd like to be clear on the
terms. Is the height difference measured from tow release to finish or from
altitude when crossing the start line to finish?

Is an other safe answer to tow to 2300msl behind the start line, climb to
whatever altitude I can, and declare the release to be the starting point?