Ok, well I worked this out:
sender, DragDropQueryEventArgs e)
var treeViewItem = e.Options.Destination
//Node being dragged
selectedTreeItem = ((RadTreeViewItem)e.OriginalSource).Item
//Check if node being dragged is top node
//If not top node being dragged then only allow drop inside
(treeViewItem.DropPosition != DropPosition.Inside)
Not sure if this is the best way to do it, but it works. If there's any better advice then I'm all ears (or eyes in this case).
Now I need to figure out the null exception being thrown if item is being dragged into white space of TreeView.