My experience would dictate that the mobs would either

A) Be pre-stocked with loot (Other MMO's have been proven to do this) upon spawn
B) A Loot table is generated for a particular set of mob and as they are killed you take X amount of items from each table (I.e. 1 from money table, 1 possible from items, etc.). This table is refreshed during low server load or when a critical point is reached.

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Also, I read over some of the RAIDID stuff... and this shit takes me back to the glory days of MC raiding.

We had one raid ID, ALWAYS the same one for Onyxia & MC. I did a lot of research and testing on this and it's a pity I have no idea where I left the data. We had a 75% drop rate on Shadowstrike from Sulfuron Harbinger when using this raidID, and we had 0% for Priest's Eye of Shadow from Majordomo Executus. This is across 9-10months worth of data collection from these raids.

We found that the raidID was linked to the raid leader, and we never kept our raids intact in the "off days". We had another person start the raid and lead it until the first boss was killed and a raidID was generated. We used this person's raidID for 3 months and got 7 Eyes of Shadow and not a single Shadowstrike during this time. Of course this was when MC was now the crap instance and we were moving on to BWL and beating our way through it.

Blizzard has obviously made some changes in regards to the raidID system since I did this data collection (RaidID's used to be fully alphanumeric) but I'm sure they still use the raidID to hash the loot tables in an instance.