I'd like to add a watermark above my image- sure it's trivial to crop out but the goal is to have a logo displayed on the image without coving the image.

Is this possible with Zen's watermarking system? If not is it trivial to implement?

You may place the watermark anywhere on the image using the zenphoto tools. If you want it "above" the image that is really not a watermark. But you can do that with HTML and CSS styling.