Can't create an alias to Desktop via cmd-option drag

I've recently discovered I can no longer go to the Finder and command-option click and drag an icon to the Desktop to create an alias to a folder/file. The mouse shows a 'curve arrow' on the icon I am dragging, indicating an alias will be create until I hover over the Desktop. At that point it becomes a normal mouse pointer, and if I let go while hovering over the Desktop, it moves the item to the Desktop instead of creating an alias.

I can create an alias in other directories and then drag the alias to the Desktop, so I seem to have permission to create files on the desktop. I can even command-option drag an icon over the Desktop in my Finder sidebar and create an alias on the Desktop that way. I just can't command-option drag directly to the Desktop. Any ideas?

Juan