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The modification to the post to prevent the post from dropping through the socket during installation should pose not performance issues. 

In terms of how to address limited post deflection area for strong posts adjacent to the culvert mounted rail, we would recommend that you extend the use of S3x5.7 posts at half post spacing past the end of the culvert. The S3x5.7 posts will not be affected by lack of soil displacement as they typically yield at groundline. You could use soil plates or post with extended embedment to ensure sufficient resistance of the post-soil forces to yield the post.