Can't set cornerRadius AND shadow on layer that has an image view stretched to its bounds?

You will need two nested views, the inner one setting rounded corners and clipping to bound, and the outer view having the shadow (and therefore not clipping). In your case inner and outer view will probably be "child" and "parent", but I guess you didn't set the right clipping values for these views?

See the answer in Why masksToBounds = YES prevents CALayer shadow?.

Normally you have to set clipsToBounds to have rounded corners, but since you want to retain the shadow you have to round the corners of the shadow as well. Have you tried setting the shadow path using a bezier path? Keep clipsToBounds/masksToBounds to the default, NO. Something like:

  [[parent layer] setCornerRadius:6.0f];
  [[parent layer] setShadowPath:
             [[UIBezierPath bezierPathWithRoundedRect:[parent bounds] 
                   cornerRadius:6.0f] CGPath]];