from anywhere, I get the circle with a slash through it when I try to drag to my desktop.
I looked and I can't find that desktop folder with that icon on it. I have other folders with icons but not my desktop one. Hmmm.
sounds like somehow you've lost permissions to your desktop directory. (computer treats your desktop, just as it'd treat a regular folder)
use those instructions i made, to fix it. Do steps in order (1,2,3,4)