First , please accept my sincere apology for not responding sooner to your post.
Today, I grabbed a set of needles and knit up a bit of the Coin Lace Stole pattern to see if I could answer your question properly for you.
"So when you drop the stitch, it releases from the stitch beneath and do you let it fall in front of or behind the strand that you knit next? I have now started this stole 4 times and can't seem to get it right. Help is appreciated."
Once you drop the stitch, make sure the loop lets go, and pick up the bar that is left. You will then knit this as a stitch. Making sure you knit into the back of the stitch just before an after the dropped stitch.
If you have any additional questions, please email me at email@example.com.
All my best,