Well one simple way would be to first setup a listener so that whenever the image was moved it would trigger the thumbnail version to update.
For that I would just tap into the MouseEvent.MOUSE_MOVE event when you started dragging the image around (so your listener for the MouseEvent.MOUSE_DOWN would add a new listener for MOUSE_MOVE). Then you could remove the MOUSE_MOVE listener when the user stopped dragging the image around.
As for the thumbnail itself, you could use a Bitmap object that's fed from a BitmapData object that itself captures the masked image via it's draw method (it can also size it down as needed).
I'll try to dig up some code for this later on, but this should be enough to get you started.
Another method would be to just create a whole copy of the masked image, scale it down, and make it update the position of the thumbnail on the MOUSE_MOVE event of the large version.