Moved to https://github.com/toxicFork/Unity3D-HighlightHelper

HighlightHelper.cs

using System;
using System.Collections.Generic;
using System.Reflection;
using UnityEditor;
using UnityEngine;

[InitializeOnLoad]
public class HighlightHelper {
    private static readonly Type HierarchyWindowType;

    static HighlightHelper() {
        EditorApplication.hierarchyWindowItemOnGUI += HierarchyWindowItemOnGUI;

        EditorApplication.update += EditorUpdate;

        SceneView.onSceneGUIDelegate += OnSceneGUIDelegate;

        Assembly editorAssembly = typeof (EditorWindow).Assembly;
        HierarchyWindowType = editorAssembly.GetType("UnityEditor.SceneHierarchyWindow");
    }

    private static void EditorUpdate() {
        var currentWindow = EditorWindow.mouseOverWindow;
        if (currentWindow && currentWindow.GetType() == HierarchyWindowType) {
            if (!currentWindow.wantsMouseMove) {
                //allow the hierarchy window to use mouse move events!
                currentWindow.wantsMouseMove = true;
            }
        } else {
            _hoveredInstance = 0;
        }
    }

    private static readonly Color HoverColor = new Color(1, 1, 1, 0.75f);
    private static readonly Color DragColor = new Color(1f, 0, 0, 0.75f);

    private static void OnSceneGUIDelegate(SceneView sceneView) {
        switch (Event.current.type) {
            case EventType.DragUpdated:
            case EventType.DragPerform:
            case EventType.DragExited:
                sceneView.Repaint();
                break;
        }

        if (Event.current.type == EventType.repaint) {
            var drawnInstanceIDs = new HashSet<int>();

            Color handleColor = Handles.color;

            Handles.color = DragColor;
            foreach (var objectReference in DragAndDrop.objectReferences) {
                var gameObject = objectReference as GameObject;

                if (gameObject && gameObject.activeInHierarchy) {
                    DrawObjectBounds(gameObject);

                    drawnInstanceIDs.Add(gameObject.GetInstanceID());
                }
            }

            Handles.color = HoverColor;
            if (_hoveredInstance != 0 && !drawnInstanceIDs.Contains(_hoveredInstance)) {
                GameObject sceneGameObject = EditorUtility.InstanceIDToObject(_hoveredInstance) as GameObject;

                if (sceneGameObject) {
                    DrawObjectBounds(sceneGameObject);
                }
            }

            Handles.color = handleColor;
        }
    }

    private static void DrawObjectBounds(GameObject sceneGameObject) {
        var bounds = new Bounds(sceneGameObject.transform.position, Vector3.one);
        foreach (var renderer in sceneGameObject.GetComponents<Renderer>()) {
            Bounds rendererBounds = renderer.bounds;
            rendererBounds.center = sceneGameObject.transform.position;
            bounds.Encapsulate(renderer.bounds);
        }


        float onePixelOffset = HandleUtility.GetHandleSize(bounds.center)*1/64f;

        float circleSize = bounds.size.magnitude*0.5f;

        Handles.CircleCap(0, bounds.center,
            sceneGameObject.transform.rotation, circleSize - onePixelOffset);
        Handles.CircleCap(0, bounds.center,
            sceneGameObject.transform.rotation, circleSize + onePixelOffset);
        Handles.CircleCap(0, bounds.center, sceneGameObject.transform.rotation, circleSize);
    }

    private static int _hoveredInstance;

    private static void HierarchyWindowItemOnGUI(int instanceID, Rect selectionRect) {
        var current = Event.current;

        switch (current.type) {
            case EventType.mouseMove:
                if (selectionRect.Contains(current.mousePosition)) {
                    if (_hoveredInstance != instanceID) {
                        _hoveredInstance = instanceID;
                        if (SceneView.lastActiveSceneView) {
                            SceneView.lastActiveSceneView.Repaint();
                        }
                    }
                } else {
                    if (_hoveredInstance == instanceID) {
                        _hoveredInstance = 0;
                        if (SceneView.lastActiveSceneView) {
                            SceneView.lastActiveSceneView.Repaint();
                        }
                    }
                }
                break;
            case EventType.MouseDrag:
            case EventType.DragUpdated:
            case EventType.DragPerform:
            case EventType.DragExited:
                if (SceneView.lastActiveSceneView) {
                    SceneView.lastActiveSceneView.Repaint();
                }
                break;
        }
    }
}