After testing the scenario using buttons I was able to reproduce it.
In this scenario, I can suggest two approaches which can be helpful:
1) Apply the progress widget to the window wrapper instead of applying it to its element. Please have in mind that this will disable the whole window, not only its content.
2) The other option is to take the height of the window(visible + hidden) and manually set the height of the div with class k-loading-image.
Let me know if additional assistance is needed on this matter.
Telerik by Progress