Good Morning Mark,
It is hard to answer questions like this without being able to see your model, so take these with a grain of salt if I am way off on some of these assumptions.
Yes the embankment needs to be included in the underlying terrain as well as the 2D grid. I prefer to insert break lines in the grid down the center of embankments to realign cells so that one face of each cell matches the embankment alignment. I usually decrease the cell size along break lines to better capture the slopes of embankments.
If you are using version 5.0.4 or later (preferably 5.0.7), I suggest using only one 2D grid and modeling the culvert as an internal boundary condition. This should theoretically remove the invisible wall and allow smoother transfer across the embankment. However, if you are stuck with an older version (5.0.3 or earlier don't allow internal boundary conditions), make sure that the structure representing the embankment doesn't have elevations significantly higher than the grid cells on either side.
Hope this is helpful!
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Maegan Nunley P.E., M.ASCE
Senior Project Engineer
Luna Engineering
Columbus OH
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