Can a DB plan allow a distribution partially as a lump sum and partially as an annuity? For example, say that the normal form is 100% J & S. Can the owner, assuming he hits the dollar limit, choose to receive his benefit 50% as a lump sum and 50% as an annuity? If the answer is yes, can you fund the benefit based on this scenario (provided, of course, that he puts his intent in writing)?

I think that optional form is available, with proper spousal consent. Funding for a particular form of payment is part of the actuarial assumptions.