Drag and Drop: Not Snapping to Center

I had a SL2 file that I recently converted to SL3. Now my drag and drop is acting crazy! I have attached a picture of what keeps happening. I CANNOT seem to find out why this keeps happening in many of my SL3 files. Help!

The settings are:

• Return item to start if dropped outside any drop target
• Snap to center
• Allow only one in each drop target
• Delay item drop states