The fractal is 3D, so the Y coordinate is important. When displacing the terrain, the fractal is sampled at the surface of the planet. When rendering the cloud, the fractal is sampled in 3D space for every part of the cloud that's sampled.
Try setting the fractal's noise stretch parameter to (1, 1000000, 1). That stretches the fractal in Y so much that it becomes almost 2D. I think that will probably solve the problem.
Matt