Couldn't get jQuery UI to do it, but, was able to do it using Vanilla JavaScript
http://jsfiddle.net/cmcculloh/676fr/
var dragging = false;
var lastE;
$('#t1').mousedown(function(e){
dragging = true;
});
$('body').mousemove(function(e){
lastE = e;
}).mouseup(function(e){
dragging = false;
});
var placeT = function placeT(e) {
var newX = Math.round((e.pageX - 2)/20) * 20;
var newY = Math.round((e.pageY - 2)/20) * 20;
if(newX <= 100){
$('#t1').offset({ left: newX });
}else if(newX >= 220 && newX <= 300){
$('#t1').offset({ left: newX });
}else{
}
$('#t1').offset({ top: newY });
}
var drag = function drag() {
if(dragging){
placeT(lastE);
}
window.setTimeout(drag, 1);
};
window.setTimeout(drag, 100);