git bash icon on windows 7
I don't know why this sort of thing happens sometimes (perhaps the icon cache doesn't get updated properly or is corrupted), but in general either rebuilding the icon cache or recreating the shortcut with the custom icon does the trick.
I had the same issue, linking an icon from a folder without whitespace in it did a trick (I had Git installed to C:\Program Files (x86) which has whitespace in it). Simply copy the icon somewhere else, e.g. C:\icons.