We have block out blinds too but still a bit of light comes out the top.
We had that problem also... Oskar's bedroom (and ours for that matter) are facing pretty much east, so the sun hits that end of the house and Oskar has 2 windows so he really cops it... we have combatted the light out of the top problem by tucking a towel folded in half length ways along the top of the curtain rod to block that gap. It really helps HEAPS!!! Not a pretty look but hell, I don't care lol.