comma usage following two alternative prepositions

Question

Could someone please tell me which of the two phrases is more correct (and why)?:

They fly at speed in, or even above, the clouds.
They fly at speed in, or even above the clouds.

Answer 1

They fly at speed in or even above the clouds. 
They fly at speed in, or even above, the clouds. 
They fly at speed in (or even above) the clouds. 

Either a pair of commas, a pair of something else, or nothing.  A single comma does not work well here.

With a single comma we have reason to treat "they fly at speed in" as a constituent and a complete structure.  However, it isn't complete.  This "in" wants an object.  Specifically, it wants "the clouds".  Alas, that phrase is already the object of a preposition on the other side of the comma.  It isn't available.  The single comma acts like a barrier. 

A pair of commas acts like an interruption.  We know where the interruption begins, and we know where it ends.  Since "the clouds" appears outside of the interruption, it also appears available to be the object of "in". 

There are other options for marking the beginning and ending of the interruption.  Parentheses are (or at least were) such a common choice for this purpose that we call this kind of interruption a parenthetical phrase.  Dashes are another common choice.  To my native-reading eye, parentheses read like a stage whisper, commas like an aside and dashes like playing to the balcony.  Choosing which punctuation to use is a question of style and effect.  Making sure that the punctuation matches is a question of grammar.