Stefan, I've prepared a patch that fixes most of the problems you
found with my commit.

I also fixed the case where a rectangle was dragged to its exact
current location, the operation was not being marked as negligible and
the result was that both the original and inserted rectangles where
being deleted.

Although this patch tidies up mouse-drag-and-drop-region, the problem
of always treating noncontiguous regions as rectangles still remains.
I have limited experience writing Emacs Lisp so I am not sure what the
options are to solve this, but I'm interested in participating in the
process of thinking/implementing a solution.

Thanks.