What I identify as “vertical stretching” in your example render seems to be a consequence of straight drop-offs and can crop up with many other nodes and effects. I would try to create a mask selecting areas closest to 90° (some kind of high-pass followed by a “V” curve to turn the high/low values to white and 50% (gray) values to black). Then I’d blend in a tiny amount of noise or blurring to breakup or soften the cliffs’ fall-off.
I’ll try to come up with an example in a bit if that isn’t a good enough description.