We need to set the clipping region of the HDC passed in to a windowless flash...

chrome/plugin/webplugin_proxy.cc

 // Copyright (c) 2006-2008 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/plugin/webplugin_proxy.h"
 
 #include "base/gfx/gdi_util.h"
 #include "base/scoped_handle.h"
 #include "base/shared_memory.h"
 #include "base/singleton.h"
@@ skipping 304 matching lines @@
   offset_rect.Offset(delegate_->GetRect().origin());
   if (!background_hdc_) {
     FillRect(windowless_hdc_, &offset_rect.ToRECT(),
         static_cast<HBRUSH>(GetStockObject(BLACK_BRUSH)));
   } else {
     BitBlt(windowless_hdc_, offset_rect.x(), offset_rect.y(),
       offset_rect.width(), offset_rect.height(), background_hdc_,
       rect.x(), rect.y(), SRCCOPY);
   }
 
+  RECT clip_rect = rect.ToRECT();
+  HRGN clip_region = CreateRectRgnIndirect(&clip_rect);
+  SelectClipRgn(windowless_hdc_, clip_region);
+
   // Before we send the invalidate, paint so that renderer uses the updated
   // bitmap.
   delegate_->Paint(windowless_hdc_, offset_rect);
+
+  SelectClipRgn(windowless_hdc_, NULL);
+  DeleteObject(clip_region);
 }
 
 void WebPluginProxy::UpdateGeometry(
     const gfx::Rect& window_rect,
     const gfx::Rect& clip_rect,
     const base::SharedMemoryHandle& windowless_buffer,
     const base::SharedMemoryHandle& background_buffer) {
   gfx::Rect old = delegate_->GetRect();
   gfx::Rect old_clip_rect = delegate_->GetClipRect();
 
@@ skipping 98 matching lines @@
 }
 
 void WebPluginProxy::OnPaint(const gfx::Rect& damaged_rect) {
   Paint(damaged_rect);
   Send(new PluginHostMsg_InvalidateRect(route_id_, damaged_rect));
 }
 
 bool WebPluginProxy::IsOffTheRecord() {
   return channel_->off_the_record();
 }