Run the following example in DHTML:

<canvas width="300" height="300" bgcolor="0x00FF00">
    <view width="100" height="100" x="20" bgcolor="0xFF0000">
        <handler name="onmouseover">
            Debug.write('over');
        </handler>
        <handler name="onmousedragin">
            Debug.write('drag');
        </handler>
        <handler name="onmouseupoutside">
            Debug.write('upoutside');
        </handler>
    </view>
</canvas>

If you click inside the red square and drag out into the green area (the canvas area) and release, you'll see the "onmouseupoutside" event firing. However, if you drag and release outside the canvas, the "onmouseupoutside" event never gets triggered.

Run it again in SWF7 or 8 (haven't tried 9 yet):

If you click inside the red square and drag out to anywhere outside the green and release, the "onmouseupoutside" still gets triggered.

This is the cause for LPP-1788, and why images get stuck when the mouse is released outside the canvas. I can try to make a crude workaround, but everything I've been trying so far just looks ugly (like dropping the dragged image unconditionally if it reaches the edge of the canvas, or if the cursor leaves and then reenters the canvas), and I think this is a more extensive problem that should probably be fixed.