have you tryed lowering your monitor resolution?
everything you have posted concerning the DXDIAG report shows that you are using 1920 x 1080 @ 60 Hz ( showing for both current mode & native mode )
would that not be pushing that onboard graphics card extremely hard with that screen res and only 128 MB of alloted RAM for the onboard video?
with that onboard video, you should have the option in the BIOS to go and either increase it to a higheer amount or even lower it? ( usually from 64 MB upwards to 1024 MB, is what one normally has the options of selecting... 64 MB, 128 MB, 256 MB, 512 MB, 768 MB, 1024 MB RAM Allotments )
just a thought to consider......... lowering that 1920 x 1080 screen res to something like 1650 x 1050 or maybe even a bit lower, might free up some of the strain and allow your Icons to appear correctly, along with possibly increasing the alloted RAM from 128 MB to something higher
anyways , best of luck Captfish
TC