I'd mount the rod on the ceiling and add a second rod in front with a valance, to help block the light.

Or create a cornice box around the curtain rod to block the light.

Or look into ceiling mounting blackout honeycomb shades.

I'd have the drapes stop an inch above the heater, although I've had them touch the heater and nothing has ever happened.

Just how dark do you need to make the room? Because you could also do 2 roman shades, mounted side by side, but light would come in between them.

Or consider vertical blinds.

I'd also take a look at the building from outside and see what your neighbors are doing.

You might want to post this in the Home Decorating forum for additional suggestions.

Stopping the drapes an inch above the heater box would be the logical thing to do. I can't think of any way around that. I would still worry that the heat would over time damage the fabric. It is odd that the heater box extends into the patio doorway - you have to step over the heater box to get outside.

You can buy ripplefold rods on line; Kirsch makes them. I don't think a minor gap at the top from a standard curtain rod mounted on the ceiling would be a problem if you are only interested in light filtering. You might want to check to see what your ceiling material is. If that's a concrete ceiling, installing a rod is going to be a lot of work.

room dividers/folding screens. They sit on the floor and they're uber portable. Whats not to like? =)