Hello skybird,
this is exactly what I did. I installed a new, fresh Windows 7 to be sure my Liberkey is running.
Unfortunately a fresh install did not change anything.
To be honest I just started Liberkey once (with Administrator rights) and my drag&drop problem still exists.
My next plan is to download a fresh copy of Liberkey and to install it to C:\ just to see if there is a possible difference in the LOCATION, my "USB-stick" is actually a USB-HDD which I usually run with a SATA connection of plugged to USB.
If you find out what kind of "settings" you have changed, it would be definitely of interest for me as I do not have installed anything but just bare Windows 7 (no Firewall, nothing) and it doesn't work.
Thanks.