I tried to reproduce the problem, but to no avail. I would suggest refering to the following online example about RadListBox with DnD - http://demos.telerik.com/silverlight/#ListBox/DragDrop and you can find its source.
Hope this helps.
the Telerik team
Sharpen your .NET Ninja skills
! Attend Q1 webinar week and get a chance to win a license! Book your seat now >>