Strangest thing. I rebooted my Macbook Pro this morning. And discovered dragging and dropping files was broken. I could select a file and drag, but when I released the mouse button the file would not drop. The mouse icon remained displaying the file name.
Clicking escape seemed to release the file. I rebooted again. Still not working. I turned my Magic Mouse on and off, disconnected from bluetooth and re-paired. Still not working. Checked the track pad on the Mac itself, same problem. So it's not a Magic Mouse issue. Nor, one presumes with the mouse drivers given it's an issue with both the external mouse and the inbuilt track pad.
A Google search shows I'm not alone, this is a quirk of Mac OSX, occurs at random. Various solutions offered including deleting your mouse preferences or Finder preferences files.
And the fix is equally strange and random. Put your Mac to sleep and wake it. Worked for me.