Had the same experience on hardy. I had my sym-linked to a folder under
an nfs-moint, but one time there was a problem mounting, so the Desktop
was a broken link (to the a nfs-folder).

When this happened the file ~/.config/users.dir was either created or
changed and the important variable here was set

XDG_DESKTOP_DIR="$HOME/"

Changing this variable solved my problem (home folder displayed on
dekstop). So in my case, this may not be a bug, because it is not
obvious what the system shall do when the Desktop is a broken link.

-- 
files from ~ shown on desktop (desktop_is_home_dir == false)
https://bugs.launchpad.net/bugs/154037
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