tim Rowledge uploaded a new version of Morphic to project The Trunk:
http://source.squeak.org/trunk/Morphic-tpr.1071.mcz

==================== Summary ====================

Name: Morphic-tpr.1071
Author: tpr
Time: 4 February 2016, 9:24:25.917309 pm
UUID: 36f2b0a7-a35d-44d1-ac45-c7f85a9d6176
Ancestors: Morphic-mt.1070

Correct transform offset when reporting invalid rects. Delegate shouldDropOnMouseUp from transformmorph to the contained morph so it actually works

=============== Diff against Morphic-mt.1070 ===============

Item was changed:
  ----- Method: TransformMorph>>invalidRect:from: (in category 'change reporting') -----
  invalidRect: damageRect from: aMorph
  	"Translate damage reports from submorphs by the scrollOffset."
  	aMorph == self
  		ifTrue:[super invalidRect: damageRect from: self]
+ 		ifFalse:[super invalidRect: (((transform localBoundsToGlobal: damageRect) intersect: bounds) expanded) from: self].!
- 		ifFalse:[super invalidRect: (((transform localBoundsToGlobal: damageRect) intersect: bounds) expandBy: 1) from: self].!

Item was added:
+ ----- Method: TransformationMorph>>shouldDropOnMouseUp (in category 'dropping/grabbing') -----
+ shouldDropOnMouseUp
+ 	"check if my submorph should drop "
+ 	^self firstSubmorph shouldDropOnMouseUp!