I have found that infrequently dragging and dropping stops working within an explorer shell. Having googled there seems to be numerous causes.

For a quick fix which works for me, try:

  1.  Press Ctrl-Alt-Del
  2.  Press Esc

This works for me every time, and it happens infrequently enough that i’m happy to put up with the workaround rather than trying to find the root cause!