I had the same problem when writing the tinyMCE plugin. I found a better way to track and drag items in the contentEditable area to listen for the DOMNodeInserted event in the contentEditable element.
Note that this element is triggered by the contentEditable element when the drop is executed, so that its target property is set to this element. You can get the moved item by specifying the event.originalEvent.target property.
, drop.
$('#editor').bind('DOMNodeInserted', function(event){
if(event.originalEvent && event.originalEvent.target){
var target = $(event.originalEvent.target);
}
});