All grain, Partial boil
 

First of all, I've been lurking and learning for a long on this site. You guys are great and very helpfully and knowledgable. I've been brewing extract w/grains and partial mash brewing for the last 3 months after a 4 year hiatus. I've brewed 6 batches since October and I'm ready to make the jump to all grain but can only do partial boils on my stove for the time being. I have a 5 gal kettle and was thinking I could do the following:

1)Mash in with 3 gallons of water
2)Sparge with 3.5 gallons (which would leave me with 6.5 gallons)
3)Boil with 4 gallons (3 gallons left after boil)
4)Then top off to 5 gallons in the carboy with the left over Sparge water (2.5 gallons)

Any reason you see this not working?

P.S.
I have a 1/2 keg in the basement but I have to wait for tax returns to make it an electric kettle

you'll lose some efficiency but I've seen several people do it. Deathbrewer has a real nice tutorial on doing just that.

Go for it! I brewed an ag partial boil Bpa with a 4gal boil and everything went well. I mashed with a 1.25 water/grain ratio and batch sparged to hit 4gal preboil. Plan for low efficiency due to the lack of an adequate amount of sparge water, mine was 60%.

I just re-read your post, i wouldn't top of with sparge water. Either do a split boil or do it the way that i did and plan for low efficiency.