The idea of woodchips tying up N2 when laid on the surface of the soil is overstated. The problem with laying woodchips and seeding (above or below the mulch) is that the woodchips may prevent the germination of the seeds.
I had this same problem with simply laying leaves as mulch. It prevented much of my Blanket flowers (
Gaillardia pulchella) from germinating, but other flowers did and they overtook the area.
I'm correcting that this year by not mulching, but I am doing a lot of chop-and-drop of the plants in that area. That way they cover the soil with organic matter and they breakdown quicker.
P.S. If the woodchips are broken down enough, you may be able to throw the seeds down and the broken down chips will basically be like throwing the seeds on bare soil. I wouldn't worry about N2 being tied up, rather worry about the seeds making good contact with soil-like material.
Curiosity: What normally grows in this area? The road area where I grow flowers was simply grass, but I tore it up and then heavily mulched and allowed the "weeds" to grow and they built the soil, then I planted the Blanket flowers (
Gaillardia pulchella) and other things. Weeds can do a lot of good to start building up soil.
I'll have to get some more pics, because I now have so many other varieties of plants here, but this is my road side yard I plant flowers, because I'm not going to eat any thing in this part of my yard (which actually belongs to the city).
