I've uploaded my dxdiag and Arma3 user files. I'm running the development build of arma 3 non-lite but the crash is reproducible in the standard build. Hope you can fix this

I know for a fact the game continues in my absence as I was hosting an mp game and my friends continued to play while I had been reduced to desktop

I also have this same problem, updated all my drivers and still this happens. The sound and in-game activity continues but after a black screen you are taken to the desktop with no cursor and the only way to shut it down is use control panel.

Windows crash report:

Log Name: Application
Source: Application Hang
Date: 07/03/2013 01:50:33
Event ID: 1002
Task Category: (101)
Level: Error
Keywords: Classic
User: N/A
Computer: ZAP
Description:
The program arma3.exe version 0.5.102.571 stopped interacting with Windows and was closed. To see if more information about the problem is available, check the problem history in the Action Center control panel.
Process ID: 1534
Start Time: 01ce1a7f1c28dfd2
Termination Time: 284
Application Path: D:\Program Files (x86)\Steam\steamapps\common\Arma 3\arma3.exe
Report Id:

Event Xml:
<Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">

<System>
  <Provider Name="Application Hang" />
  <EventID Qualifiers="0">1002</EventID>
  <Level>2</Level>
  <Task>101</Task>
  <Keywords>0x80000000000000</Keywords>
  <TimeCreated SystemTime="2013-03-06T15:50:33.000000000Z" />
  <EventRecordID>1547345</EventRecordID>
  <Channel>Application</Channel>
  <Computer>ZAP</Computer>
  <Security />
</System>
<EventData>
  <Data>arma3.exe</Data>
  <Data>0.5.102.571</Data>
  <Data>1534</Data>
  <Data>01ce1a7f1c28dfd2</Data>
  <Data>284</Data>
  <Data>D:\Program Files (x86)\Steam\steamapps\common\Arma 3\arma3.exe</Data>
  <Data>
  </Data>
  <Binary>55006E006B006E006F0077006E0000000000</Binary>
</EventData>

</Event>