I spent a day messing with CSS before I found anataliocs tip. Add wmode=transparent
as a parameter to the YouTube URL:
<iframe title=<your frame title goes here>
src="http://www.youtube.com/embed/K3j9taoTd0E?wmode=transparent"
scrolling="no"
frameborder="0"
width="640"
height="390"
style="border:none;">
</iframe>
This allows the iframe to inherit the z-index of its container so your opaque <div>
would be in front of the iframe.