Is it within YouTube's TOS to overlay static content on a video?

Question

Given a YouTube video, is it within YouTube's terms of service to overlay some sort of static content on the video? For instance, if I'm using the embedded video player on my site, and I overlay a button on the video, is this allowed or a violation?

You can see an example of what I'm talking about as a fiddle or as code below:

<div>
    <iframe width="560" height="315" src="http://www.youtube.com/embed/6BTCoT8ajbI" frameborder="0" allowfullscreen></iframe>
    <div id="overlay" style="position: absolute; top: 0; left: 0;">
        <button style="position: absolute; top: 40px; left: 20px;">Button</button>
    </div>
</div>

Answer 1

YouTube prohibits modification of the embedded video. Here is the relevant section of the YouTube terms of service:

General Use of the Service—Permissions and Restrictions

YouTube hereby grants you permission to access and use the Service as set forth in these Terms of Service, provided that:

...

If you use the Embeddable Player on your website, you may not modify, build upon, or block any portion or functionality of the Embeddable Player, including but not limited to links back to the YouTube website.