I can see that your sample works - however I've got the load on demand optionn turned off - when I try that on your sample, drag and drop seems to stop working:-
I also added some html to the 1st tree, as it's representative of what I'm doing.
I'm populating the data source via an ajax call, when a user clicks a button on the page.
This is why I don't wish to reload the data, after a user drags a node, I need to prompt them to confirm the move, and then make an ajax request to update the database .