I see discussion which explains that gxt shims iframes. which means it creates another iframe which floats on top of the iframe you have. it looks like that is what makes dragging over the background iframe possible.
but this means when you drop, the target element recognized is the shim iframe, not yours. and you can not identify which element in the background iframe it is dropped over. it is possible to use x, and y values to recalculate which element is the true target, that would be very elementary. is that another way to find the true target element?
I worked thru this problem by creating a droptarget on the iframe. preview in the draggable will not work across frames. you need to pass mouse events directly to your own draggable subclass to get it to pick up on drag motions. you will need to adjust the clientX, clientY values too, because they are not in reference to the iframe, not the parent frame. But that is really it.