It turns out I had the sense of the GetLocalBounds bool wrong everywhere, so ...

chrome/browser/ui/views/create_application_shortcut_view.cc

 // Copyright (c) 2011 The Chromium Authors. All rights reserved.
 // Use of this source code is governed by a BSD-style license that can be
 // found in the LICENSE file.
 
 #include "chrome/browser/ui/views/create_application_shortcut_view.h"
 
 #include "base/callback.h"
 #include "base/utf_string_conversions.h"
 #include "base/win/windows_version.h"
 #include "chrome/browser/prefs/pref_service.h"
@@ skipping 138 matching lines @@
   SetupLayout();
 }
 
 void AppInfoView::UpdateIcon(const SkBitmap& new_icon) {
   DCHECK(icon_ != NULL);
 
   icon_->SetImage(new_icon);
 }
 
 void AppInfoView::Paint(gfx::Canvas* canvas) {
-  gfx::Rect bounds = GetContentsBounds();
+  gfx::Rect bounds = GetLocalBounds();
 
   SkRect border_rect = {
     SkIntToScalar(bounds.x()),
     SkIntToScalar(bounds.y()),
     SkIntToScalar(bounds.right()),
     SkIntToScalar(bounds.bottom())
   };
 
   SkPaint border_paint;
   border_paint.setAntiAlias(true);
@@ skipping 343 matching lines @@
 void CreateChromeApplicationShortcutView::OnImageLoaded(
     SkBitmap* image, ExtensionResource resource, int index) {
   if (image->isNull()) {
     NOTREACHED() << "Corrupt image in profile?";
     return;
   }
   shortcut_info_.favicon = *image;
   static_cast<AppInfoView*>(app_info_)->UpdateIcon(shortcut_info_.favicon);
 }