I think the concern here wouldn't be so much the capacity of the CPU cooler itself - some low profile coolers can work pretty well, but the suitability of the case for an overclocking build.
Anything I suggest is going to use the majority of the clearance you have between motherboard and PSU. I can't say exactly but you'd assume that having a fan that close to a flat surface is going to dent performance, not to mention the generally poor internal airflow. In something like say a RVZ01 a downblower like the GeminII (or an upblower for that matter) works pretty well as its sucking in cool air from outside the case (or exhausting the CPU heat directly).
I doubt you'll fry your chip - overclocking is a trial and error process until you find a suitable spot. In your case I'd imagine the results, even if you spend a good amount on a cooler, are going to be disappointing.
My advice - The Elite 120 is a cheap case and overclocking isn't a "value for money" endeavour. I'd ditch the case and get something similar but more suited to your objectives. As I've mentioned the Elite 130 is very similar but does support a 120mm rad CLC, and is pretty cheap. The Thermaltake Core V1 isn't expensive and has some good cooling options (though comes up a bit short on tower coolers). For air cooling my pick would be the Node 304, it's not particularly cheap and has no ODD (might be a deal breaker) but it's got excellent air cooler support as well as 120/140mm rad options too.