There is definitely an issue when one of the container/parent element (or divs) of the sortable has position:relative. I fixed the issue by setting position:inherit on the container element, as reported by @ninsky0815 in above posts. This problem appears in FF it works fine in chrome and IE without applying the above fix. so to summarize if you have html structure like
<div id="midde">
<div id="setup">
<div id="sortable">
<div class="item">item 1<div>
<div class="item">item 2<div>
<div class="item">item 2<div>
</div>
</div>
</div>
Then , make sure the parent elements don't have position:relative. I fixed the problem my changing the below css
#middle{ position:relative}
To
#middle{position:inherit}
and it worked perfectly even when the page had scrolls and scrolled after. Hope this helps someone.