+1 for the utterly baffled club then. Not a clue TBH. When you get a location in GMaps, what sort of accuracy does it give - how big is the blue shaded circle around your location - it might be that it's actually still using the cell towers, I generally get 50-100m accuracy if using cell triangulation.
If the GPS icon is flashing continously, it means that it can't get a lock, the green lines stop flashing when it does.
If it's flashing even after a factory reset, when outdoors with a good view of the sky, then most likely your GPS antenna has come detached from the motherboard, somehow, maybe due to a drop? Whatever, it's most likely a hardware fault. If you're feeling confident, you could try stripping it down - check the guide here:
Blog: HTC Desire tear-down and re-assembly ? TJworld
If the GPS icon is on and not flashing and you still can't get a lock, then f*ck knows, perhaps the Ruskies* have shot down all the GPS satellites above your part of the UK.
Edit: just spotted
this. How's your signal?
*Please note, anyone resident in Russia, or any other part of Eastern Europe who reads this - it's a (probably poor) attempt at humour harking back to the days when the USSR was a place to be scared of and "4 Minute Warning" was a common phrase, before Reagan and Gorbachev started trying to make the world a better place.
And there were probably no GPS satellites...
Please do not take offence.