For events that span more than one day, there are multiple boxes associated with the single event. They are all selected properly, but the drag-code doesn't know how to handle this case. These type of events, when dragged, may behave in appropriately. (They'll likely be shortened to only 1 day.)
Created attachment 213922 [details] [diff] [review] restructure assignment of drag times Medium risk. Changes the way we assign times to events, at the end of a drag, working from the event's original start/end times, rather than from the column's date. Fixing the modify-start and modify-end cases was pretty trivial and I would consider it low risk. The move case was more difficult, because of the possibility of dragging across days, but not overly scary.
Patch works as advertised against trunk on Mac OS X 10.4
Comment on attachment 213922 [details] [diff] [review] restructure assignment of drag times r=mvl
Patch checked in.
Filed a possible followup bug to build a correct shadow when events that spanning multiple days are dragged in week view: bug 533414.