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

chrome/browser/ui/views/tabs/dragged_tab_controller.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/tabs/dragged_tab_controller.h"
 
 #include <math.h>
 #include <set>
 
 #include "base/callback.h"
@@ skipping 1250 matching lines @@
 #else
   gint x, y;
   gdk_display_get_pointer(gdk_display_get_default(), NULL, &x, &y, NULL);
   return gfx::Point(x, y);
 #endif
 }
 
 gfx::Rect DraggedTabController::GetViewScreenBounds(views::View* view) const {
   gfx::Point view_topleft;
   views::View::ConvertPointToScreen(view, &view_topleft);
-  gfx::Rect view_screen_bounds = view->GetContentsBounds();
+  gfx::Rect view_screen_bounds = view->GetLocalBounds();
   view_screen_bounds.Offset(view_topleft.x(), view_topleft.y());
   return view_screen_bounds;
 }
 
 int DraggedTabController::NormalizeIndexToAttachedTabStrip(int index) const {
   DCHECK(attached_tabstrip_) << "Can only be called when attached!";
   TabStripModel* attached_model = GetModel(attached_tabstrip_);
   if (index >= attached_model->count())
     return attached_model->count() - 1;
   if (index == TabStripModel::kNoTab)
@@ skipping 67 matching lines @@
 #else
     NOTIMPLEMENTED();
 #endif
   }
 }
 
 TabStripModel* DraggedTabController::GetModel(BaseTabStrip* tabstrip) const {
   return static_cast<BrowserTabStripController*>(tabstrip->controller())->
       model();
 }