Once I have my dropped stitch all laddered up from where it dropped to the first knit stitch made in the same column, I take a piece of waste yarn and weave it (usually up a rib inside the sock), make an "extra" stitch-looking catch to "knit" the laddered-up stitch to the next real stitch in the row below it, and then weave the other end of my repair yarn down the other side of the rib.
But I kind of like the idea of unravelling right to the bottom of the sock -- except that most of my drops are in the ribbing at the very, very top of the sock and knit up again within a round of dropping. I'm not sure I could bring myself to ladder the entire length of the sock.
(posted by me this day on sockknittingmachines)
