The problem
jQuery loses it when an element is both a sortable container and a sortable element within a sortable container.
The solution
As simple as wrapping the problematic object inside another element. Fiddle: http://jsfiddle.net/ExLqv/12/
The 'inner' container is wrapped like this:
<div class="container-wrapper">
<div class="container">
<div class="item"></div>
<div class="item"></div>
<div class="item"></div>
</div>
</div>
You avoid the problem, because the inner container itself is no longer both a sortable container and a sortable object within a sortable container. Instead, the sortable object is now the wrapper. Note that the classname container-wrapper is just for illustration's sake. You can remove it and it won't change the functionality.
Now, I don't know if this approach is any better for you than the workaround you mentioned yourself. I do feel though that a workaround of some sorts is necessary. A lot of people have run into this problem, and there seems to be general consensus that nested sortables are not a feature supported at this moment. There seem to be a bunch of plugins that fix the problem for you, judging by the results if I google 'jquery sortable nested' :)