As I noted in the forum, I was not about to publish 7.8 for Moodlers because of some issues which will hopefully be fully resolved with the publication of 0.7.8.1. 0.7.8.1 has a number of structural changes which will have to be reflected in dragmath.php, so whomever is maintaining dragmath in HEAD will need to address that.
For myself, as I have indicated, I will prepare a zip for moodle 1.9.x that addresses all the changes for testing and will post under a separate MDL when its ready. Once I have confirmation that it installs on works on a variety of systems I will publish it for use.
SInce I think I will be moving the dragmath folder itself to /lib/dragmath, the critical changes in the htmlarea version of the file can be probably copied to the tinyMCE dialog.php.... Mauno is also in the loop on this, but as he noted before, HEAD has been behind the curve from time to time.
I think this should probably be reopened pending resolution of the issues raised above
done, thanks Mark Grober for new version notification