I think touch/hold is unacceptable. It's not an established convention (that I've ever seen) so it's bound to be confusing and irritating.
A couple more possibilities:
If there's any blank space around the list items that could be the target for scrolling.
Scroll buttons: a button at the top to scroll up and a button at the bottom to scroll down.
Whatever solution you use, it should have strong feedback, e.g. when an item begins to be dragged it should "light-up" so there's a clear indication that something is happening to that one item and the touch is probably not the begininning of a scroll.
I wouldn't be too set on drag drop. If a comfortable feeling drag drop cannot be worked out I wouldn't force it, I'd try another approach. There may be a better solution.