How do I create an object that can only be dropped in one room? If that's not possible how do I set up a flag that will only be set when an object is dropped in a specific room?

Also how can you lock a container so that it will open only if you have a specific object. For example if you want a player to only open a locked box (container) with a specific key (object)?

Use the below script for your drop script on the object. This will illustrate that the ball can only be dropped in the kitchen.

If the player has "ball" and "#quest.currentroom#" is equal to "kitchen" Then Move object "ball" to "kitchen" Else Print "You cant drop the ball here!"

Hope that helps.