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

chrome/browser/ui/views/notifications/balloon_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/notifications/balloon_view.h"
 
 #include <vector>
 
 #include "base/message_loop.h"
 #include "base/utf_string_conversions.h"
@@ skipping 458 matching lines @@
   return gfx::Rect(frame_rect.x() + offset.x(),
                    frame_rect.y() + GetShelfHeight() + offset.y(),
                    content_size.width(),
                    content_size.height());
 }
 
 void BalloonViewImpl::Paint(gfx::Canvas* canvas) {
   DCHECK(canvas);
   // Paint the menu bar area white, with proper rounded corners.
   gfx::Path path;
-  gfx::Rect rect = GetLocalBounds();
+  gfx::Rect rect = GetContentsBounds();
   rect.set_height(GetShelfHeight());
   GetFrameMask(rect, &path);
 
   SkPaint paint;
   paint.setAntiAlias(true);
   paint.setColor(kControlBarBackgroundColor);
   canvas->AsCanvasSkia()->drawPath(path, paint);
 
   // Draw a 1-pixel gray line between the content and the menu bar.
   int line_width = GetTotalWidth() - kLeftMargin - kRightMargin;
@@ skipping 11 matching lines @@
     NOTREACHED();
     return;
   }
 
   // If the renderer process attached to this balloon is disconnected
   // (e.g., because of a crash), we want to close the balloon.
   notification_registrar_.Remove(this,
       NotificationType::NOTIFY_BALLOON_DISCONNECTED, Source<Balloon>(balloon_));
   Close(false);
 }