I forgot to say, you can drag normally now if you don't mind passing the mouse click to the pally's window. If that's okay, you can add <PassThrough> to the hotkey and remove the <Else> at the end.

Code:
Hotkey LButton>
   <PassThrough>
      <If MouseIsOverWindowRect Wow1 635 471 666 444>
         <SendLabel shaman>
            <Key ctrl numpad3>