In Umbrello svn head, I can't move the self association at all -
it is always placed at the top edge of the class.

Created an attachment (id=11223) [details]
class before 

Created an attachment (id=11224) [details]
class after moving vertex

The attached file shows what happens when you grab one of the vertexes and move
it below the class. Selecting the association line shows the vertexes that are
still above the class but not the one under the class.

The previous attachment shows the before picture. (Sorry, I didn't put a
comment on that attachment.)

Ah, okay. I had been trying to move the assoc by dragging a
_line_segment_ not a _vertex_.
As for your problem: How about just preventing the dragged vertex
from going underneath any (own class or other) object box.
I think that's how I'll fix this problem if I don't hear back.

SVN commit 418815 by okellogg:

mouseMoveEvent(): Prevent the moving vertex from disappearing underneath a
 widget, else there's no way to get it back.
The current behavior is somewhat jerky - improvements are very welcome :)
BUG:106356


 M  +26 -0     associationwidget.cpp  


--- trunk/KDE/kdesdk/umbrello/umbrello/associationwidget.cpp #418814:418815
@@ -2411,6 +2411,32 @@
 		p.setY(newY);
 	}
 
+	// Prevent the moving vertex from disappearing underneath a widget
+	// (else there's no way to get it back.)
+	UMLWidget *onW = m_pView->testOnWidget(p);
+	if (onW) {
+		const int pX = p.x();
+		const int pY = p.y();
+		const int wX = onW->getX();
+		const int wY = onW->getY();
+		const int wWidth = onW->getWidth();
+		const int wHeight = onW->getHeight();
+		if (pX > wX && pX < wX + wWidth) {
+			const int midX = wX + wWidth / 2;
+			if (pX <= midX)
+				p.setX(wX);
+			else
+				p.setX(wX + wWidth);
+		}
+		if (pY > wY && pY < wY + wHeight) {
+			const int midY = wY + wHeight / 2;
+			if (pY <= midY)
+				p.setY(wY);
+			else
+				p.setY(wY + wHeight);
+		}
+	}
+
 	//move event called now
 	QMoveEvent m(p, oldp);
 	moveEvent(&m);

You are too fast for me!

I would make sure that the vertex will never get under the class at all. My moving the vertex under the class was only a means of illistrating a point. I originally came up with the problem when I did a copy/paste from one class diagram to another. The associations get moved around, and some vertecies end up under classes. Most of the time it's not an issue as you can move the class out of the way to get to the vertex. The problem is when the vertex is part of an association attached to the class you need to move. Then the vertex moves with the class and you can never get to it. So if the above fix prohibits the copy/paste from doing the wrong thing, then closing is OK. 

Or do I need to open a bug report against the paste operation?

Keep up the good work.