Using drupal_form_submit for pass-through to external login on click
Is there any way to have drupal_form_submit honor redirects from outside the site?


Not really - drupal_form_submit() is invoked as a result of Drupal receiving a form POST  on the relevant action URL - it doesn't care about how it's been invoked, and doesn't care about the URL itself (the form's already been submitted, so the action is obsolete by that point anyway).

If you need to POST form data to an external site, but have the processing done by Drupal, your only option is to use cURL or similar.