I very rarely direct fire this mash tun. If I were to do so I would pull the material up the keg shell so as to avoid melting or burning. There is no top piece but I have a 12 inch lid and put a folded towel on top for now. I had virtually no heat loss during the mash.
I just got the new mash tun insulator on the old barrel. It should be able to handle up to 350º F without damage and has a full length zipper for easy use. The Keg Koozy is well sewn and they use good material. This is a big upgrade from the old moving blanket I used previously haha...