Well, being defined and being defined properly are two different things. For instance if you call the base class implementation of dragEnterEvent() it will probably reject the event despite that you accepted it in your own code.
Oooh, now that's a nice cryptic response. :-)

So I removed the 'QGraphicsScene::dragMoveEvent(event)' from my dragMoveEvent method and I can see the drop in the scene.

However, when there is an item underneath the cursor I still dont see the event in
my item dropEvent()?

Is there documentation which details when to call, and when not to call the base methods of the QGraphicsScene/QGraphicsItem?