There are still some issues. Here are my observations:
1. The mouse events are now unblocked and DragDrop works with both Mouse and Touch.
2. But now touch events stopped working. You should be able to observe this with the VS2012 simulator(or touch hardware). If you use the Mouse Mode(in simulator), then clicks are registered. But when you switch to Basic Touch Mode(in simulator), clicks are not registered. With r101, mouse and touch both work.
3. Great to see that multi-touch is working now with DragDrop objects.
Edit: Here is a tiny project
illustrating the bug.iunkn2012-09-11 23:29:39