For what it's worth, I just wanted to share my recent experience regarding the same drag/drop issue. I recently got exactly the same issue on my Windows 7 system soon after I installed the Windows updates (no surprise there!).


Here is the fix that worked in my case:

(Fix taken from Microsoft Answers Forum)

  • Left & Right Click any file or folder and hold the mouse click buttons
  • Press and hold Esc key
  • Press and hold Ctrl key
  • Release the mouse button first and then release the keys

Voilą!