Doors and Windows - Basement window return treatment

Have completed the framing in my basement but the framing at one particular window leaves me with a dilema that I can't see a simple solution to.
At this particular window the rough opening is flush with my ceiling framing so I believe I should extend the ceiling drywall to the window. I have this same problem on one side of the window as I had to frame around some ceiling ductwork and this framing is also flush with the side of my window rough opening. I really would prefer to not run drywall as a return on this window at all as in the winter there is a tendency for condensation on this window.

Any suggestions are appreciated.

If getting a smaller window is not an option, how about running the sheetrock like you are thinking, but then covering it with Marrlite, or some other sort of waterproof tileboard that will stand up to the moisture problem.

Good idea Lefty. My one hope was that I would be able to use wood as a return at least on the two sides and on the bottom. Any thoughts on the transition from the drywall to the wood on the one side?