Hi.
What happens if you select the Desktop folder icon which is still in the sidebar? Do the contents of your desktop folder display in the Finder window?
If so, then go to the Finder Menu bar and click View > Show Path Bar. When the contents of the Desktop folder are displayed in the window, the path bar (at the bottom of the window) should display the current path to that folder, as it does in this screenshot:
Is it possible that the Desktop folder was somehow relocated into another folder? (I don't even know if that's possible).
Perhaps the folder itself has become hidden. You said that when you use Terminal to create a new Desktop folder, the response was that the file already exists.
Try this Terminal command to unhide the folder...
chflags nohidden ~/Desktop/
Post back and let us know if this has any affect.