A WindowsFormsHost is hosted in its own Hwnd and that window will always be above any other WPF element. This is documented by MS here - http://msdn.microsoft.com/en-us/library/ms744952.aspx.

Note we have recently made some changes (as mentioned here) where we will host the unpinned flyout and the preview of the pane splitter in a top level window so that those items will be displayed above any HwndHost (such as a WindowsFormsHost) when using an HwndHost within the xamDockManager.