Can you provide a simple repro case?

I created a test for this and it passes with no modification to DD:

https://gist.github.com/2696768

Sure, here's a quick example in JSFiddle, http://jsfiddle.net/GQkXH/. All the yellow boxes are draggable while the blue one is configured as the dragNode. If you drag the yellow box with just DD the dragNode(blue box) is physically dragged instead, which is supposed to happen. Under DD Delegate the yellow boxes are incorrectly dragged around since it's ignoring the 'dragNode' config option.

I did a quick patch in our copy of YUI 3.5 by editing _delMouseDown in dd-delegate

     _delMouseDown: function(e) {

            var tar = e.currentTarget,

                dd = this.dd,

        conf = this.get('dragConfig');

            

            if (tar.test(this.get(NODES)) && !tar.test(this.get('invalid'))) {

                this._shimState = Y.DD.DDM._noShim;

                Y.DD.DDM._noShim = true;

                this.set('currentNode', tar);

                dd.set('node', tar);

                if (dd.proxy) {

                    dd.set('dragNode', Y.DD.DDM._proxy);

                }

        else if ( conf.dragNode ) {

                    dd.set('dragNode', conf.dragNode);

                }

        else {

            dd.set('dragNode', tar);

        }

                dd._prep();

                

                dd.fire('drag:mouseDown', { ev: e });

            }

        }

I changed up the logic a little bit. I made it check config.dragNode before checking for proxy. That way if they want a custom proxy they can.

Fixes #2532291 - Added config check for dragNode test on mousedown
View Commit: f5f7dbff94a21f8722fe2074f12184c34ed3dc70

Shipped in 3.6.0. Marking closed/fixed.