Thanks - that works (updated the game).
However: it only solves the collision bugs, because doing it in this way will make the object lag behind the mouse. That looks and feels great in your game because it adds weight to the falling rocks but when dragging the ball in mine it feels a little off. I tried to mitigate it by setting the dragSpeed pretty high and adding a speed limit to the object while not getting dragged but then some new ways to cheat open up.
I give up now. Thanks anyway :)