Resize the content in div with the drag

Question

I am trying to drag and resize the div layer. And i am able to do that perfectly. But the issue is i am unable to apply resize effect to the content in the div. I tried applying same to the img element directly and it allows me to drag the element around but doesn't let me resize it.

http://jsfiddle.net/MwV8g/1/

Answer 1

There you go:

http://jsfiddle.net/MwV8g/18/