When using a zoomable container, jquery ui .draggable() doesn't work properly

http://jsfiddle.net/sberube/d10e21ne/

Fiddle available.

1. Drag the draggable item around, observe it works properly.

2. Click Zoom out and observe that the container and contents get smaller (click 2-3 times)

3. Now drag the draggable item around, observe its coordinates are incorrect while dragging and doesn't drag properly.