Wow, that is a big PITA. Don't know if this has been suggested before in this thread, and if so, whether it worked or not. But try deleting the Desktop .DS_store file, which may be corrupt. These files are responsible for storing view options. Creating a new one might help.
They are normally invisible, so you will first have to make all invisible folders and files visible. You could do this using TinkerTool, but it's really quite easy using Terminal in Applications>Utilities.
Open Terminal and just copy/paste this command in. Then hit return.
defaults write com.apple.finder AppleShowAllFiles -bool true
Next, to make this work, you need to restart the Finder. Copy/paste and hit return.
killall Finder
You will now see a .DS_store file on the Desktop. (They're all over the place, there are ones for every folder. This one is for your Desktop folder.) Just move it to the Trash. It will be recreated as soon as you do anything with the Desktop. You will need to restore your Desktop view settings.
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To revert to the default of NOT showing hidden files:
defaults write com.apple.finder AppleShowAllFiles -bool false
Restart Finder also required to take effect. Same as before.
killall Finder
When finished, just close the Terminal window.
EDIT: looks like this was tried and at least for the OP and a few others it didn't work. Look at the very beginning of this thread. But I see it did work for someone and it might work for you. There is a more direct way of doing this, but you must be very careful to copy/paste the command and not try to type it in. For that, see Thomas Reed's post right at the beginning of the thread.
