--- a/jdk/src/windows/native/sun/windows/awt_Component.cpp	Tue Mar 13 19:58:39 2012 -0700
+++ b/jdk/src/windows/native/sun/windows/awt_Component.cpp	Mon Mar 19 21:22:18 2012 +0400
@@ -302,6 +302,7 @@
         delete m_childList;
 
     DestroyDropTarget();
+    ReleaseDragCapture(0);
 
     if (m_myControlID != 0) {
         AwtComponent* parent = GetParent();

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/jdk/test/java/awt/Frame/WindowDragTest/WindowDragTest.java	Mon Mar 19 21:22:18 2012 +0400
@@ -0,0 +1,107 @@
+/*
+ * Copyright (c) 2012, Oracle and/or its affiliates. All rights reserved.
+ * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
+ *
+ * This code is free software; you can redistribute it and/or modify it
+ * under the terms of the GNU General Public License version 2 only, as
+ * published by the Free Software Foundation.
+ *
+ * This code is distributed in the hope that it will be useful, but WITHOUT
+ * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
+ * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
+ * version 2 for more details (a copy is included in the LICENSE file that
+ * accompanied this code).
+ *
+ * You should have received a copy of the GNU General Public License version
+ * 2 along with this work; if not, write to the Free Software Foundation,
+ * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ *
+ * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
+ * or visit www.oracle.com if you need additional information or have any
+ * questions.
+ */
+
+/*
+  @test
+  @bug 7128738
+  @summary dragged dialog freezes system on dispose
+  @author Oleg Pekhovskiy: area=awt.toplevel
+  @library ../../regtesthelpers
+  @run main WindowDragTest
+*/
+
+import java.awt.Frame;
+import java.awt.event.InputEvent;
+import java.awt.AWTException;
+import test.java.awt.regtesthelpers.Util;
+import java.awt.Robot;
+import java.awt.Point;
+import java.awt.Dimension;
+import java.awt.event.MouseAdapter;
+import java.awt.event.MouseEvent;
+
+public class WindowDragTest {
+
+    static boolean passed = false;
+
+    public static void main(String[] args) {
+        try {
+            Robot robot = new Robot();
+            robot.setAutoDelay(1000);
+
+            Frame frame1 = new Frame();
+            frame1.setBounds(50, 50, 300, 200);
+            frame1.setVisible(true);
+            frame1.toFront();
+            frame1.addMouseListener(new MouseAdapter() {
+                @Override
+                public void mouseClicked(MouseEvent e) {
+                    // Clicking frame1 succeeded - mouse is not captured
+                    passed = true;
+                }
+            });
+            robot.delay(1000);
+
+            Frame frame2 = new Frame();
+            frame2.setBounds(100, 100, 300, 200);
+            frame2.setVisible(true);
+            frame2.toFront();
+            robot.delay(1000);
+
+            Point p = frame2.getLocationOnScreen();
+            Dimension d = frame2.getSize();
+
+            // Move cursor to frame2 title bar to drag
+            robot.mouseMove(p.x + (int)(d.getWidth() / 2), p.y + (int)frame2.getInsets().top / 2);
+            Util.waitForIdle(robot);
+
+            // Start window dragging
+            robot.mousePress(InputEvent.BUTTON1_MASK);
+            Util.waitForIdle(robot);
+
+            // Dispose window being dragged
+            frame2.dispose();
+            Util.waitForIdle(robot);
+
+            // Release mouse button to be able to get MOUSE_CLICKED event on Util.clickOnComp()
+            robot.mouseRelease(InputEvent.BUTTON1_MASK);
+            Util.waitForIdle(robot);
+
+            // Click frame1 to check whether mouse is not captured by frame2
+            Util.clickOnComp(frame1, robot);
+            Util.waitForIdle(robot);
+
+            frame1.dispose();
+            if (passed) {
+                System.out.println("Test passed.");
+            }
+            else {
+                System.out.println("Test failed.");
+                throw new RuntimeException("Test failed.");
+            }
+        }
+        catch (AWTException e) {
+            throw new RuntimeException("AWTException occurred - problem creating robot!");
+        }
+    }
+}