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

chrome/browser/ui/views/notifications/balloon_view.cc

Index: chrome/browser/ui/views/notifications/balloon_view.cc
===================================================================
--- chrome/browser/ui/views/notifications/balloon_view.cc	(revision 74228)
+++ chrome/browser/ui/views/notifications/balloon_view.cc	(working copy)
@@ -476,7 +476,7 @@
   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);