drag element and cursor position differ on insert of new element

Question

Problem I'm facing is the position of Cursor and Element during drag, it works fine in most of the operation but failed on one case where I add new row on droppable over function. jsFiddle link http://jsfiddle.net/rainbow99984/QbZrN/5/ just try to move item 2 over item 0 a new row will be created with item Over, at this point cursor is at Over but element is not.

I already have checked few previous suggestion on SO (1) jQuery draggable shows helper in wrong place after page scrolled and (2) JqueryUI Drag: Cursor not at the same position as draggable element but it still have the problem, Can anyone look into the codes and give some advice
Thank you all !

$.fn.dragInit=function(){
         $(this).each(function(){
           if($(this).data("drag_Enable")==true){
            $.noop();
         }else{
           $(this).draggable({
                containment: "#canvas",
                cursor:"move",
                zIndex:99,
                delay:100,
                revert:"invalid",
                opacity:0.7,
                stop:function(event,ui){
                    if(ui.helper.hasClass("dummy-remove")){
                    var emptyDrop1=$("<div class='e'>Stop</div>");
                    emptyDrop1.dropInit();
                    $(ui.helper).replaceWith(emptyDrop1);//replace original place with Empty cell
                    }
                    $(".dummy").remove();
                    $("#canvas li").filter(function(){
                    return $(this).children(":not('.e')").length==0; 
                    }).remove();
                    },
                    drag:function(event,ui){
                    var msg = "Handler for .mousemove() called at ";
                        msg += ui.position.top +":"+ui.position.left+ ", " + ui.offset.top+":"+ui.offset.left;
                        $("#pos1").html(   msg  );
                     var elm=$(".dummy");
                     if(elm.length==1){
                           ui.helper.css("top", ui.position.top);
                       ui.helper.css("left", ui.position.left);
                       var top=elm.css("height")-ui.helper.css("top");
                       ui.position.top +=  top;
                    }
                          }
                });
                $(this).data("drag_enable",true);   
              }
         }); 
         return this;
     }
     $.fn.dropInit=function(){
         $(this).each(function(){
                     if($(this).data("drop_enable")==true){
                $.noop();
            }else{
                $(this).droppable({
                    tolerance:"pointer",
                    accept:"div",
                    drop:function(event,ui){
                    var drop2=ui.draggable.clone();
                    $(drop2).removeAttr("style");
                    var ne=$(".dummy");//Helper li.
                    var pos=$(this).parent().children().index($(this));
                       if($(this).hasClass("e") && $(drop2).hasClass("a") ){
                                             //drop on empty cell
                        $(this).replaceWith(drop2);
                    }else if(drop2.hasClass("b")){
                                          // drop on existing cell, add it in new row. 
                           ne.html(drop2);
                          }else{ 
                      ne.children(":eq("+pos+")").replaceWith(drop2);   
                      } 
                                      drop2.parent().removeClass("dummy").addClass("c");
                      drop2.dragInit().dropInit();
                      ui.draggable.addClass("dummy-remove");
                },
                     over:function(ev,ui){
                 if($(this).hasClass("e")){
                    $.noop();
                  }else{
                    $(".dummy").remove();
                    var elm=$("<li class='dummy'>");
                    var emptyDrop=$("<div class='e'>over</div>");
                    var emptyDrop1=$("<div class='e'>over</div>");
                    elm.append(emptyDrop).append(emptyDrop1);
                        if($(this).parent().is(":last-child")){
                       elm.insertAfter($(this).parent());   
                    }else{
                      elm.insertBefore($(this).parent());   
                    }