The thing I've yet to figure out for this scenario ("net short") is how to hedge against inflation. Let's say someone who opts to go net short is correct, and a 10 or 20% correction happens in the proper timeframe. But at the same time inflation begins and in short order drives the prices of those assets up by 20%.

It's a concern, but I don't think it's a very big one. Inflation matters--I imagine both nominal and after-inflation future prices--but it generally takes a while for inflation to add up to something material, and the time frame I'm looking at, a couple of years, isn't that long. I think the main hedge against inflation, as usual, is just holding a lot of equities on average over the long run.

FWIW, monetary inflation is now very moderate in the US lately. I use the MCT inflation metric, which is the portion of inflation that's common to all goods and services, excluding product- or service-specific changes. I think of it as a measure of how much the "general purpose" purchasing power of a dollar has slid, rather than measuring the cost of any one person's lifestyle. MCT is down to 2.34% in the year to November, the lowest reading since the year ending December 2020. In the decade to November 2020 it was remarkably steady in the 1.33-2.09% range, so it's now nearly back to the old normal. I mention this because my "what if" scenario used 3.24% which might well be too high. That doesn't change the likely real return, of course, but it matters if for example you're playing with very long dated options which are nominal.

A bigger problem might be a slide in the trade weighted US dollar, which certainly affects "general purpose purchasing power". The dollar is very strong at the moment, but I think it may potentially just end up to be a passing spike, maybe lasting less than a year. Other than a spike in autumn 2022 it's the highest it has been in the last 22 years. Measured in euros I have had an excellent year! The gains in my main account are 20.0% YTD in US dollars as a percentage of the average balance (even though I have averaged 57% cash) but the return is 4.1% higher measured in euros or most any other currency because of the US dollar tailwind.

Jim