First login issues with desktop icons & context menu

I've somehow got an issue where, upon first login I cannot right-click and get the standard context menu (new folder, open terminal, paste...etc) and I can only see portions of the upper left desktop icons. I can still see the desktop wallpaper, panels, and all menus appear to function.

This issue is resolved with a logout/login. Affects all users and root. Any thoughts on the cause, however?