Hi Ricky,
while displaying a texture, we need to reserve a specific texture size which is always set to the dimension of a layer. As the shadow is larger than the texture, there is no space to show the shadow as the layer is always at the size of the original image.
As soon as you use the "resize" effect from the "uv mapping" you are creating space for transparency around the image and therefore space for the drop shadow as well. After resizing the image you can use the drop shadow as you now have transparency to drop in.
Hope this is explained not to complicated.
Markus