Movie clip coordinates

I am trying to get a movie clip - nested inside another movie clip on the stage - to match the x, y coordinates of the mouse. Attached is an example file both in Flash 8 and MX2004 formats.

I can get the drag to occur, but the problem is that the dragged mc’s coordinates are relative to it’s parent movie clip and not the stage. I have been messing around with localToGlobal with not much luck. I think I may be using it wrong, though. I have left it out of the example file. Here is the relevant code:

var dragging = false;
this.onMouseMove = function() {
	if (dragging == true) {
		this.container.drag._x = _xmouse;
		this.container.drag._y = _ymouse;
this.container.drag.onPress = function() {
	dragging = true;
this.container.drag.onRelease = function() {
	dragging = false;
this.container.drag.onReleaseOutside = function() {
	dragging = false;

Thanks so much for any help.