I'm using :
- Flash player debug (version 10,2,152,32) and Firefox browser (version 3.6.16)
- Flash player standalone (version 10,1,103,19) and Chrome browser (version 7.0.517.44)
- Windows XP SP3
I reproduced the bug on my current version of FTM (version 1.911) and on your demo swf (I dont't know what version of FTM is here http://www.greensock.com/as/swf/TransformManagerAS3_Demo.swf ?).
The bug occured often when stretching the image at its maximum and when its rotation angle is small...
I'll try this week to make a sample AS3 application to determine these steps.