The problem is that in AE you can animate "Top" and "Left", but you have no control over whether that becomes a transformX /Y or a change to the css top: left:. AE makes it's own mind up. It seems that once you somthing other than just move the item (eg rotate or scale) it decides to stop using top /left and combine it all into a single transform including x y and rot. AE does not let you choose to animate the css top: left: property and also add a css transform for rot.
nevertheless, I've found a working hack for now. when the drag starts, add a class
.notransition {
-webkit-transform:none!important;
transform:none!important;
}
and so the transform is erased and the drag works perfectly. The weird thing is that after the drop, DO NOT remove the class. It stays for the remainder of the time. If you think about it, it makes sense, since the transform is none and the top: and left have been permanently modified by jquery-ui draggable.