I have this weird thing that I’m running into. Basically, in FF9.0.1, dragleave doesn’t fire when the mouse leaves on top or to the left. Is that part of the spec? It works nicely on Chrome though.
I refer you to this jsfiddle link: http://jsfiddle.net/johncch/uWkFJ/6/
There are several bugs filed (1, 2, 3) related to problems with dragleave in Firefox.
Until they are fixed, putting a margin around the drop target seems to help but that may not be practical for your situation.