i'm having the same exact problem you are. i've started building a movie, and then at some point dragging and dropping symbols into the movie doesnt work....I have been having the problem sporadically, but now i cant get work at all...(flash 5 on g4 mac, 512 memory)
I've tried quitting, restarting, allocating more memory, starting a new movie with fewer symbols... i've tried adjusting memory up to exorbitant levels and back down again.
i'm about to try reinstalling the app....I did install 5.0a, but have the same problems with 5.0. This problem feels like some sort of memory management problem, i've seem similar mysterious problems when working in director.