Turns out my issue was caused by my poor internet connection (fluctuating pings) as I suspected. I took my PC over to my girlfriends place and the game runs fine without any desync issues. This really sucks for me as I can't fix it unless I change ISP's. Currently under a 24 month contract though :(

Pretty sure my issue isn't related to the "cursed" item or bag within a bag thing, as it's happened with new characters. I think mine is related to my poor internet connection with fluctuating ping. It sounds like a lot of us have the same issue caused by different things.

My ping often fluctuates between 30ms and 400ms... I have a feeling that when it spikes, it causes the desync and can't interact with anything for a period of time... sometimes it takes many minutes to fix itself. Sometimes logging out then logging back in fixes it, other times it doesn't.

Sometimes I can play for 5-10 mins without any issue, mostly when I'm alone. It seems to happen the most when I team up with my mate and we're voice chatting over steam. It's super frustrating and makes the game unplayable which REALLY sucks :(