The above code mostly fixed the issue, however, when you have something like:

<div style="height:10em;overflow:auto;">
  <ul id="sort1" class="groupWrapper" >
    <li class="sortable">A</li>
    <li class="sortable">B</li>
    <li class="sortable">C</li>
    <li class="sortable">D</li>
    <li class="sortable">E</li>
    <li class="sortable">F</li>
    <li class="sortable">G</li>
    <li class="sortable">H</li>
    <li class="sortable">I</li>
    <li class="sortable">J</li>
    <li class="sortable">K</li>
    <li class="sortable">L</li>
  </ul>
</div>
<script type="text/javascript">
$(document).ready(
	function () {
		$('.groupWrapper').Sortable(
			{
				accept: 'sortable',
				helperclass: 'sortHelper',
				tolerance: 'pointer'
			}
		);
	}
);
</script>

There are two issues:

• The scroll position is not calculated properly because it only checks the immediate parent (the <ul>)
• The items near the top and bottom of the <ul> are not positioned correctly (try dragging and item to the top or bottom). This becomes even more apparent if you have multiple <ul>'s with sortable items inside of the div. I believe this is related to #1205, as it fixes the problem.

Here is a patch, incorporating all of the fixes:

• Implements the original solution from this ticket
• Additionally calculates the scroll position for immediate parent AND all ancestors
• Implements #1205 which fixes issues with mis-detecting the top/bottom of <ul>'s

Index: idrop.js
===================================================================
--- idrop.js	(revision 3)
+++ idrop.js	(working copy)
@@ -89,7 +89,7 @@
 				if (jQuery(jQuery.iDrag.dragged).is('.' + iEL.dropCfg.a)) {
 					if (iEL.dropCfg.m == false) {
 						iEL.dropCfg.p = jQuery.extend(
-							jQuery.iUtil.getPositionLite(iEL),
+							jQuery.iUtil.getPosition(iEL),
 							jQuery.iUtil.getSizeLite(iEL)
 						);//jQuery.iUtil.getPos(iEL);
 						iEL.dropCfg.m = true;
@@ -135,7 +135,7 @@
 				var iEL = jQuery.iDrop.zones[i].get(0);
 				if (jQuery(jQuery.iDrag.dragged).is('.' + iEL.dropCfg.a)) {
 					iEL.dropCfg.p = jQuery.extend(
-						jQuery.iUtil.getPositionLite(iEL),
+						jQuery.iUtil.getPosition(iEL),
 						jQuery.iUtil.getSizeLite(iEL)
 					);
 					if (iEL.dropCfg.ac) {
Index: isortables.js
===================================================================
--- isortables.js	(revision 3)
+++ isortables.js	(working copy)
@@ -148,12 +148,15 @@
 			return;
 		var cur = false;
 		var i = 0;
+		// get the scroll data
+		var tScroll = jQuery.iUtil.getScroll(jQuery.iDrop.overzone);
 		if ( e.dropCfg.el.size() > 0) {
 			for (i = e.dropCfg.el.size(); i >0; i--) {
 				if (e.dropCfg.el.get(i-1) != jQuery.iDrag.dragged) {
 					if (!e.sortCfg.floats) {
 						if ( 
-						(e.dropCfg.el.get(i-1).pos.y + e.dropCfg.el.get(i-1).pos.hb/2) > jQuery.iDrag.dragged.dragCfg.ny  
+						(e.dropCfg.el.get(i-1).pos.y - tScroll.t + e.dropCfg.el.get(i-1).pos.hb/2) > jQuery.iDrag.dragged.dragCfg.ny
 						) {
 							cur = e.dropCfg.el.get(i-1);
 						} else {
@@ -161,8 +164,8 @@
 						}
 					} else {
 						if (
-						(e.dropCfg.el.get(i-1).pos.x + e.dropCfg.el.get(i-1).pos.wb/2) > jQuery.iDrag.dragged.dragCfg.nx && 
-						(e.dropCfg.el.get(i-1).pos.y + e.dropCfg.el.get(i-1).pos.hb/2) > jQuery.iDrag.dragged.dragCfg.ny  
+						(e.dropCfg.el.get(i-1).pos.x - tScroll.l + e.dropCfg.el.get(i-1).pos.wb/2) > jQuery.iDrag.dragged.dragCfg.nx &&
+						(e.dropCfg.el.get(i-1).pos.y - tScroll.t + e.dropCfg.el.get(i-1).pos.hb/2) > jQuery.iDrag.dragged.dragCfg.ny
 						) {
 							cur = e.dropCfg.el.get(i-1);
 						}
Index: iutil.js
===================================================================
--- iutil.js	(revision 11)
+++ iutil.js	(working copy)
@@ -104,12 +104,16 @@
 	{
 		var t=0, l=0, w=0, h=0, iw=0, ih=0;
 		if (e && e.nodeName.toLowerCase() != 'body') {
-			t = e.scrollTop;
-			l = e.scrollLeft;
 			w = e.scrollWidth;
 			h = e.scrollHeight;
 			iw = 0;
 			ih = 0;
+			t = e.scrollTop;
+			l = e.scrollLeft;
+			while ((e = e.parentNode) && (e.nodeName.toLowerCase() != 'body')) {
+				t += e.scrollTop;
+				l += e.scrollLeft;
+			}
 		} else  {
 			if (document.documentElement) {
 				t = document.documentElement.scrollTop;

Interface is no longer supported; consider switching to jQuery UI.