This is exactly what I could see my pup doing. He'd spend the entire night working to get a corner, then yank the entire thing in and destroy it.The sheet should help... just like we used to do with the parakeet's cage. ONe thing to watch is to be sure that the pup can't reach the sheet, pull it into the crate and rip it to shreds.
It's unconventional, but we found we could NOT have the puppy sleep upstairs with us. When we did, endless barking and whining. I think part of it was that it was just totally unfamiliar to him. He didn't ever go upstairs, and suddenly he's in a strange room and can't get to us? AHH! We moved him downstairs to "his" room at night, gave him a super awesome chewy treat and suddenly, we had a quiet dog at night. Now that he's older, he can handle sleeping in bed with us on occasion, but if his crate was next to the bed and he could SEE me but not get to me? I could see it once again being a bark-and-whine fest.