It looks ok to me. But, if you are unsure the best thing you can do is fire off a quick email to adsense support, they always reply promptly and are happy to answer the most basic of questions.
It is misleading, you might get banned. They are getting strict about adsense optimization - I was banned for placing images next to ads. Remove it ASAP, or you will be in trouble.
Answer is it depends - if it's an mage ad then definitely misleading and not allowed. If it's an ordinary AdSense for content ad unit then definitely okay I would say (but work on your placement in this case).
There is sufficient amount of text above and below this view port. No, I was thinking of placing text ad button, with black background for padding white space. Would that be a violation?