Planted Tank Guru
Join Date: Jun 2004
Location: Baton Rouge, LA
Yes, 3.5" is room enough.
But if you join the top and sides as I did, you lose another 0.75", so only 2.75" remains. A recessed splash guard shaves off a little more space. Not mounting the ballast directly on the wood so the back of the case can get airflow, a little more space if the ballast doesn't fit between the reflectors. And so on. If you plan out everything carefully, you can probably make it work.
Being the first time I did this, I didn't entirely trust my plan. I also thought I might add a third bulb and another ballast in the future, if I wanted to experiment with high intensity bursts; though that never happened. And should something happen like the ballast fails or reflectors corrode, the replacements might be larger. So I just opted for the 1x6, and no worries about space at all.