Moving a file from Thunar to desktop fails

Using XFCE/Thunar, I cannot move file ('/home/user/foo/bar') to desktop ('/home/user') (i.e. by holding SHIFT). The desktop directory is set in .config/user-dirs.dirs by:

XDG_DESKTOP_DIR="$HOME/"

Copying the file to the desktop works fine, as does moving between directories open in separate Thunar windows. It was suggested on #xubuntu this is a Thunar/xfdesktop integration bug. The relevant versions are:

Ubuntu 11.04
xfdesktop4: 4.8.1-1ubuntu2
thunar: 1.2.1-3ubuntu2

1. What I expected to happen: The file should have been moved (i.e. "mv /home/user/foo/bar /home/user/bar")

2. What actually happened: I get a dialog with "Error opening file '/home/user/bar/bar'." along with retry/skip/etc. options (note that path is not a typo, it does end with 2 copies of bar).

ProblemType: Bug
DistroRelease: Ubuntu 11.04
Package: xfdesktop4 4.8.1-1ubuntu2
ProcVersionSignature: Ubuntu 2.6.38-10.46-generic 2.6.38.7
Uname: Linux 2.6.38-10-generic x86_64
NonfreeKernelModules: nvidia
Architecture: amd64
Date: Fri Aug 12 12:22:09 2011
ExecutablePath: /usr/bin/xfdesktop
InstallationMedia: Ubuntu 11.04 "Natty Narwhal" - Release amd64 (20110426)
ProcEnviron:
 LANGUAGE=en_GB:en
 PATH=(custom, no user)
 LANG=en_GB.UTF-8
 SHELL=/bin/bash
SourcePackage: xfdesktop4
UpgradeStatus: No upgrade log present (probably fresh install)