Hi Chris, 

There are some clues to this hidden in these mantis reports:

http://bugs.squeak.org/view.php?id=1453
[BUG][FIX] Drop shadows clipped incorrectly for translucent morphs 

http://bugs.squeak.org/view.php?id=7276
0007276: shadowForm computes bounds inconsistantly. 

http://bugs.squeak.org/view.php?id=3333
0003333: SimpleButtonMorph bug

Basically the true top left of a morph depends on its fullbounds.
Sometimes bounds topLeft is used. For scaled morphs this means the scale factor will be figured wrong.

Further I suspect the solution is tricky since fullbounds and layout interdepend on one another.

What you described sounded superficially similar. It also seemed to me something I had not seen before. The shadow offset changing with location. So if you can find a simple recipe for seeing the problem that would help track things down.

Needless to say a test that fails until the problem is solved would be a good start.

Yours in curiosity and service, --Jerome Peace