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.
David Eedle 
thanks man
Put your Mac to sleep and wake it. Worked for me. Work for me too Thanks
Relaunch finder, it takes less time than sleeping.
It’s not so much a quirk of OS X as it is a quirk of OS X 10.7. I’ve been using OS X since 10.0 and never saw anything like this with any other version. Sadly, it seems to be a major problem with 10.7, even up to 10.7.4 (latest).
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Putting it to sleep worked!!! š THANK YOU!!!! I’ve been working on this for 2 hours! Everyone else posted things like “delete this .kext file here…” or “trash your cache by…” anyway, thank you.
That worked! Thanks. Weird world of Mac eh?
I use a Wacom tablet and noticed that this issue only affects the mouse. The wacom drag and drop still functions. Weird. Computers, right???!!
I’m new to Mac..how do I put it to sleep? is that the same as restarting?
No. Sleep is not the same as Restart. Click the Apple icon at the top left of the screen. Click the Sleep option.
Thank you – I had rebooted numerous times, changed mouses (mice) etc. Sleep / wake worked. Please Apple find & fix this glitch. Drag & drop is fundamental.