Without knowing for certain, I would immediately assume that (being a bureacratic beast) the authority deciding grant awards will have utterly inflerxible rules as to what qualifies. As such, any requirement for imagination or lateral thinking means automatic rejection. But only a discussion with the people involved will reveal the truth, and then only once in writing (hopefully irrevokable). Your central problem is easier to resolve. There is the option of having the underside of the roof sprayed with foam which sets rigid. This completely eliminates vapour/condensation/ventilation/draft considerations. Alternatively, if you want to fix the insulation in yourself then either use foam sheets or something like glass wool. The former is impermeable to vapour and no worries about ventilation arise - unless the widespread worship of draughts is invoked (you only need to consider that when you are not insulated plus vapour barred). If the latter type then the best thing is to cover everything on the inside with a vapour barrier (plastic sheet is perfectly OK) and then you need not worry about ventilation - unless your roof leaks and you need to dry the place out. I am unfamiliar with the use of sheep's wool but in practice anything will help - I know a guy who always laid out his old carpets in the attic. Each layer increased the insulation. But the vapour barrier is worth taking into account when sealing the roof as you plan and if you apply one you are completely in the clear. It is warm, moist air condensing on cold surfaces that causes dampness. As described, no surface that the inside air touches will be colder than the air itself and it can't migrate through the barrier to the cold roof.