Can't Drag and Drop between OSX and OSX VM

Fusion 5.03

OSX 10.8.4 fully patch on both the VM and the Host.

I'm simply trying to drag a 397KB file from the desktop of the host to the desktop of the VM

I drag it over and it snaps back to the host desktop.

I've uninstalled and reinstalled the VMWare Tools on the VM.

I've also uninstalelled and then rebooted and then installed and rebooted with no luck.

I've also rebooted the Host machine as well.

This was originally a Lion install where the tools were installed and then upgraded to Mountain Lion and then patched.

I'm assuming it's probably something simple I'm missing.

Thanks for the help

Josh