Here’s a strange problem a client of mine ran into when upgrading from Snow Leopard to Lion: when trying to drag and drop icons on the desktop, the icons would get stuck to the cursor and never drop! Strangest problem I have ever seen. Anyway, it was ridiculously annoying because the person could not copy files, move files, or drag files to the trash. The whole drag and drop option was basically useless.
Thankfully, after some playing around there were a couple of annoying solutions that did solve the problem. Hopefully, Apple comes out with a fix for this in the next few releases of Lion. If not, then read on and try a couple of these hack solutions for a while.
Method 1 – Sleep/Wake Computer
The first thing you can try is to simply put the Mac to sleep and then wake it up again. You can do this by clicking on the Apple logo and choosing Sleep.

Then just press Enter to wake the computer up. If you are looking for a quick shortcut, just press Control + Shift + Eject.

That should hopefully allow you to drag and drop again for some time. If that doesn’t work for you, try the next solution.
Method 2 – Switch User Accounts
Another hack that works is creating a new user account and then simply switching to the new user account and then switching back to the original account. For whatever reason, this also fixes the issue for a certain amount of time.
To create a new user account, go to System Preferences and then click on Users and Groups. Click on the + icon at the bottom left to add a new user.

To switch accounts, simply click on the Apple logo and choose Log Out YourName.

Method 3 – Uninstall Screen SharingSoftware
If you have either DisplayPad or AirDisplay installed on your Mac, they have been known to cause this issue. Go ahead and delete them, if you can, and see what happens. If your issue disappears, you may need to try and download the latest versions of the programs to see if it’s compatible with Lion.
For DisplayPad, you also need to go to System/Library/Extensions and delete these two files:
DisplayPadDriver.kext
DisplayPadFrameBuffer.kext
Other possible problematic software are iScreen, iDisplay, AirParrot or DisplayLink. If you either of those installed, delete the app and any drivers. Make sure you try to use the uninstall option from the DMG for these programs. If you don’t have the DMG, just download it again from the website.
Some users have reported that the Logitech software and driver for their mouse/keyboard was the cause of the problem. You should uninstall the software and delete the kext file in System/Library/Extensions.
Lastly, virtual display drivers can cause this issue too, i.e. Slashtop for Mac, etc.
Method 4 – Repair Disk Permissions
If nothing above is working for you, try to repair the disk permissions and see if that fixes anything. You can do this by going to Applications, Utilities and clicking on Disk Utility. Click on your Mac hard drive on the left side and then click on Repair Disk Permissions.

Method 5 – Drag Options
Go to System Preferences, Universal Access, click on Mouse & Trackpad, then click on Trackpad Options.

Now go ahead and check Dragging and choose without Drag Lock.

Method 6 – Relaunch Finder
Another hack solution to this problem is to relaunch Finder. You can do this by click on the Apple logo, choosing Force Quit and then choosing the Finder.

So, in conclusion, you can either uninstall some third-party display software that is the root cause or if you do not want to uninstall the program, then you can use one of the above mentioned hacks to keep getting the functionality back until the software vendor releases a new version that works properly on Lion. If you have any questions or comments, post them here!


















First method worked for me, thanks!
I had the same problem. In my case, it was a conflict with “AirDisplay”. I just uninstalled it. Everything is fine now. I found the information here: See at the end…
Pascal
https://discussions.apple.com/thread/3852634?start=0&tstart=0
Man, THANK YOU so much. I was desperate with this, and this helped me to solve the problem. (What worked for me was to Force quit finder.)
I can breathe again!