Can't drag and drop files in iTunes 7.6

I've suddenly lost the ability to drag and drop files in iTunes, so I can't change the order of items within a playlist, move tracks from one playlist to another, or move a selection of tracks to an external drive. When I click & hold on a track, nothing happens at all; if you try to drag the file it doesn't move then bounce back - just no reaction at all. One day it worked fine, next time I launched iTunes the problem appeared. I'd had 7.6 up and running for about a month without this problem, and had no other software downloads or updates immediately before the problem appeared. I'd not changed any iTunes preferences either.

I've checked that lefthand column in the playlist is selected, & that shuffle is turned off, & I'm not trying to move things into a smart list. I've tried trashing the com.apple plist, and repairing disk permissions. My iTunes library lives on an external hard drive, but this hasn't been an issue before. Drag and drop still works fine in other apps, so I don't suppose it's a mouse or Finder issue.

I see a few other people have posted about this, but I haven't seen any solutions yet that worked for me. Am I missing something blindingly obvious? If anyone's got any ideas on this one I'd be eternally grateful - the ability to move things around easily was one of the main attractions of iTunes for me.