I am using a RadLayoutControl in one of my applications and suddenly it started to throw IndexOutOfRangeException while editing the layout both in the designer and at runtime.

I just found out that after removing the padding on the control it started working fine again. I had recently added padding to add some space between the layout and the docked command bar.

So it looks like the RadLayoutControl dos not like having padding. The exception was being thrown in Telerik.WinControls.UI.LayoutTree.GetDropTargetNode(DraggableLayoutControlItem dropTargetElement, Point mousePosition, Type dragContext)

For the time being, I will add an empty space at the top of the layout instead of using padding.

Hope it can help you resolve this bug.