I am toying around with the idea to make a div tag hidden for a set amount of time, then make it appear on top of content. Does this violate TOS?
Yes, it would violate the TOS imo "May not direct user attention to the ads via arrows or other graphical gimmicks". https://www.google.com/adsense/support/bin/answer.py?answer=48182 Always email adsense support for a confirmation of anything that may violate the tos before you go live.
I'm not sure if on top of content is a good idea, but I think you can try on side of content and move it down when the user scrolls the page(to the user it appears as not moving, thus not drawing attention). However, I'd make sure to contact Google Adsense Team, show them an example, and ask them if it's ok.
let me tell you one thing.. do not try to play with google codes.. thats your one way ticket to banishment.
Don try to merge the ads with the content but you can place them beside your content..like the one they showed in the video
It will probably be against TOS. You can not place adsense in a manner where it will bring undue attention of visitors.