Whenever I start to drag on the diagram control, regardless of what mode its in, it momentarily shows the no-drop cursor, or no-op cursor, the black circle with a line through it.

This is really annoying, its only there for a split second and makes absolutely no sense to be displayed.

Frankly its a showstopper, if I can't remove it, I will have to consider another library/framework.

The control displays the stop cursor when an item creation or modification cannot be completed at the current location for some reason. Items of zero width or height (or close to zero) are not allowed,  so you see the stop cursor unless you move the mouse away from the point where you started drawing. You will see the cursor again if you move the mouse back to the start point, or if you try to resize an item to zero width or height.

Stoyan