Well, here's my take.
Only thing is that I ditched the containers you were using. Is that cheating? Seems like they were only there to get the image centered. No need.
This works as expected with no side effects.
Here's a working demo you can test:
http://jsfiddle.net/dEhgV/14/
(You need to click on the pane with the baboon first.)
HTML
<body>
<img src="http://growl.cz.cc/drag/baboon.png" />
</body>
CSS
html, body {
width: 100%;
height: 100%;
overflow: hidden;
}
jQuery
EDIT: Thanks to @stagas for the reminder to clean up redundancies.
var $img = $('img'); // Cache the image. Better for performance.
$img.draggable();
$img.css({left: ($('body').width() / 2) - ($img.width() / 2)})
.css({top: ($('body').height() / 2) - ($img.height() / 2)})
$(document).keydown(function(event) {
if (event.keyCode == 38) {
var adjustment = 1.25;
} else if (event.keyCode == 40) {
var adjustment = 0.8;
} else {
return;
}
var offset = $img.offset();
var width = $img.width();
var height = $img.height();
var newWidth = width * adjustment;
var newHeight = height * adjustment;
var diffWidth = newWidth - width;
var diffHeight = newHeight - height;
var hcenter = $('body').width() / 2;
var vcenter = $('body').height() / 2;
var leftPercent = (hcenter - offset.left) / width;
var topPercent = (vcenter - offset.top) / height;
$img.offset({top: offset.top - (diffHeight * topPercent), left: offset.left - (diffWidth * leftPercent)});
$img.width(newWidth).height(newHeight);
});