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I've noticed that I can drag and drop data sets into a custom tool within ArcCatalog 10.1, but if I launch the tool in ArcMap and try to drag and drop layers already in my TOC, I get an error
one or more dropped items invalid
but I can browse to it and load that way.
It sounds like your custom tool is expecting a dataset rather than a layer.
Consequently, when you drag and drop a dataset in ArcCatalog all is fine.
However, when you try to drag and drop a layer from the Table of Contents it rightly complains that it is not a dataset.
Try drag and drop of the dataset, which is the source of the same layer, from the Catalog window of ArcMap and I expect that will work.
To make your tool accept either a dataset or a layer take a look at the type of data element that parameter is based on in your model.
To more clearly appreciate the difference between a layer (listed in the Table of Contents of ArcMap) and a spatial dataset (listed in the Catalog window of ArcMap and in ArcCatalog) I recommend reviewing Difference between map layer and spatial dataset (e.g. feature class, shapefile)?
Also, this error can occur because of fact that your raster values are not interger data type. Convert it (ArcToolbox / Spatial Analyst Tools / Math / Int) and try again using this output. ;)
Adrian's answer worked for me.
Also, this error can occur because if your raster values are not integer data type. Convert it (ArcToolbox / Spatial Analyst Tools / Math / Int) and try again using this output.
