Is there any chance of you taking a couple of photos of the area :

(1) looking down the length of the wall with your camera as close to the wall as possible and aimed to the left or right showing the length of the room and what the knee wall looks like when looking down from end to end.

(2) looking at the wall in question straight from in front of it from approximately the center of room  showing floor to ceiling and place a yard stick or 36-48 inch piece of wood standing on end leaning up against the wall. make sure to let us know the length of the stick.

With these two photos we can give you much better advice.

Dan

How high will the layout be built?  If the layout is at or near 4 feet, then the back drop will be angling over the top of the layout at @ 45 degrees.  I would think that that would limit the back drop to sky. 

If the layout is built below the level of the roof angle, you will have a space of whatever the distance is between the layout height and the angle.  I don't think I would actually do a backdrop in that case.  If the layout is 40 inches and the straight wall is 48 inches, you only have 8 inches of vertical wall.  In that case I would use building flats in any city area, and either trees, or small hillocks, or a combination of both for the backdrop and paint everything that angles over the top sky.

whoa!  you gents are fast.  right now it's attic space which I'm clearing out.  I'll try and finish then attach a photo or drawing.  I'm flexible about layout height but perhaps a base level of about 4 feet.  high mountains and deep canyons perhaps going much lower with the scenery.  Yes, I'm concerned about angling over the top of the scene, particularly with the potential to create pesky and distracting shadows against the backdrop.

If I paint sky on the backdrop, is there a way to include clouds or hills with the proper (adjusted for angling in) perspective?

I am in agreement of painting sky only.  I would purchase 3 shades of blue using the darkest at the top and the lightest at the bottom, and the middle shade in the center.  I would also make a mix of 50 / 50 light and medium shades and the same for the dark and medium shade.  Paint on the dark blue then down below that the mix of the dark and medium blues followed by the medium blue. Follow this until you finish up with the light blue.  Make sure that you blend in the colors as you go.  A  4” brush works great for this.  I think that you will end up with some amazing depth for your back drop.

I'm following this discussion with interest as my only possible area for a layout has the same sort of configuration with roughly a 4' wall and then sloped ceilings to a flat, as described by the OP.

It was always my thought to only paint sky color on the slopes.

I'm of a similar opinion as Blue:  sky color on the slope.  I think I'd use a fairly light non-distracting flat sky blue.   On the vertical walls, you might want to peruse Charley's blog.  He has some interesting approaches to what works for a background.  You're so involved with looking at the foreground, the backgrounds seem to work.  It's here:

http://model-railroad-hobbyist.com/node/1890

Sky blue and clouds...  Use the slope to your advantage. The slope can add depth for the clouds, forced perspective.   Might not be as simple as it sounds in my head.

Or tell everyone your layout is based on a fictional premise;  speed of light railroading, where background seems to angle inward becasue of the speed.  Just a thought,  a dumb one mind you.

Marc Fournier, Quebec

Nobody's suggested the obvious!  Now, this may go against the grain some, but what about holding the benchwork off away from the kneewall.  If your benchwork started say 24" from the kneewall, then the backdrop could go vertical till about 6 foot high or so (eye level).  I realize that this would make the effective room width 10 feet instead of 14, and that may not be an option, especially if you desire a center peninsula.  I can think of some arguments for holding the benchwork off 24 inches:  1) You get to have a normal vertical backdrop that goes to approx eye level. 2) you could cove the backdrop as it transitions from vertical to the roof rake (angle).  3) The extra two feet of "dead" space could be used as a chase for layout wiring, or for limited hidden trackage and/or staging.  If you kept the staging to say 4 tracks or less, it should be accessable for maintenance albeit not too comfortably. 

I have a similar bonus room, and though my layout is in the basement of our house, I did consider the bonus room prior to layout construction, and pondered on these scenarios your dealing with now.

Here's the room more or less cleared out and ready for design and construction.  Thank you all for your thoughtful comments.  You can see why the in-sloping wall could pose a problem for the creation of a world in miniature.  I like using various shades of blue (light to dark) to image the sky.  I may also bring the higher topo scenes in away from the wall closer to the center of the room.  Still thinking about it.

Also, there are 3 dormers on the left side.