I have experienced less than ideal results by dry hopping when the beer is still on the yeast, though. I noticed high levels of geraniol, a rose like quality. I started xferring the beer before dry hopping and haven't noticed it since.
Mike Tonsmeire in a recent article in BYO seems to claim the opposite: he says that yeast can convert geraniol provided by hop (e.g. citra) into citrusy beta-citronellol.
Based on some of the published research out there the biotransformations are far from a 1-way street. Yeast can convert many hop oils from one to another. The end results will depend on a bunch of factors, so I would personally attach little faith in any sweeping generalizations without experimental evidence. You just can't isolate one reaction and make reliable predictions based solely on that.
In addition, most of the major hop oils have drastically different effects depending on how much is present and what other oils are there as well. I have recently acquired some citronellol, geraniol, linalool and alpha- & beta-pinene to do some experimentation, and none of them smell much like hops or dry-hopped beer at all. The flavor and aroma chemistry is just way too complex.