Preserved Lemons: is it ok if they are above the liquid
For the process to occur, the lemons should be covered by the sugar/salt/liquid. There is a little time frame where being partially exposed is OK, and the other lemon pieces will start to soften and break down, but the lemon should be pushed down a little to be covered.

The preservation happens because the sugar and/or salt 'dry out' the cells of the lemon through osmosis, causing water to be expelled from the lemon's cells. This both creates the desired texture change and prevents bacteria from spoiling the lemon while this process occurs.

There is also fermentation by desirable bacteria, that can survive in these conditions, so the entire quantity should be covered.