The build error has nothing to do with locale:

/bin/sh ../libtool --tag=CC   --mode=link i686-pc-linux-gnu-gcc -I.. -I../common -DWNCK_I_KNOW_THIS_IS_UNSTABLE -DBINDIR=\"/usr/bin\" -DLOCALEDIR=\"/usr/share/locale\" -DDATADIR=\"/usr/share\" -DSYSCONFDIR=\"/etc\" -DXFCEMODDIR=\"/usr/lib/xfce4/modules\"  -pthread -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include   -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include   -I/usr/include/xfce4 -I/usr/include/gtk-2.0 -I/usr/lib/gtk-2.0/include -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/cairo -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12 -I/usr/include/atk-1.0   -I/usr/include/libwnck-1.0 -I/usr/include/pango-1.0 -I/usr/include/cairo -I/usr/include/startup-notification-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/gtk-2.0 -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0   -I/usr/include/xfce4/xfconf-0 -I/usr/include/dbus-1.0 -I/usr/lib/dbus-1.0/include -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include   -DEXO_API_SUBJECT_TO_CHANGE -I/usr/include/exo-0.3 -I/usr/include/gtk-2.0 -I/usr/include/xfce4 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0 -I/usr/include/cairo -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12   -DDBUS_API_SUBJECT_TO_CHANGE -pthread -I/usr/include/thunar-vfs-1 -I/usr/include/exo-0.3 -I/usr/include/gtk-2.0 -I/usr/include/xfce4 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0 -I/usr/include/cairo -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12   -I/usr/include/thunarx-1 -I/usr/include/gtk-2.0 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0 -I/usr/include/cairo -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12   -I/usr/include/dbus-1.0 -I/usr/lib/dbus-1.0/include -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include   -O3 -march=native -mtune=native -pipe -export-dynamic -Wl,-O1 -o xfdesktop xfdesktop-main.o xfdesktop-menu.o xfdesktop-windowlist.o xfdesktop-xfce-backdrop.o xfdesktop-xfce-desktop.o xfdesktop-xfce-desktop-enum-types.o xfdesktop-xfdesktop-marshal.o xfdesktop-xfdesktop-icon.o xfdesktop-xfdesktop-icon-view.o xfdesktop-xfdesktop-icon-view-manager.o xfdesktop-xfdesktop-window-icon.o xfdesktop-xfdesktop-window-icon-manager.o xfdesktop-xfdesktop-clipboard-manager.o xfdesktop-xfdesktop-file-icon.o xfdesktop-xfdesktop-file-icon-manager.o xfdesktop-xfdesktop-file-properties-dialog.o xfdesktop-xfdesktop-file-utils.o xfdesktop-xfdesktop-regular-file-icon.o xfdesktop-xfdesktop-special-file-icon.o xfdesktop-xfdesktop-volume-icon.o ../common/libxfdesktop.la ../common/libxfdesktop-menu.la  -lSM -lICE -lX11 -pthread -lgthread-2.0 -lrt -lglib-2.0   -lxfcegui4 -lgtk-x11-2.0 -lxfce4util -lgdk-x11-2.0 -latk-1.0 -lgio-2.0 -lpangoft2-1.0 -lgdk_pixbuf-2.0 -lpangocairo-1.0 -lcairo -lpango-1.0 -lfreetype -lfontconfig -lgobject-2.0 -lgmodule-2.0 -lglib-2.0   -lwnck-1 -lgtk-x11-2.0 -lgdk-x11-2.0 -latk-1.0 -lgio-2.0 -lpangoft2-1.0 -lgdk_pixbuf-2.0 -lpangocairo-1.0 -lcairo -lpango-1.0 -lfreetype -lfontconfig -lgobject-2.0 -lgmodule-2.0 -lglib-2.0   -lxfconf-0 -ldbus-glib-1 -ldbus-1 -lgobject-2.0 -lglib-2.0   -lexo-0.3 -lgtk-x11-2.0 -lxfce4util -lgdk-x11-2.0 -latk-1.0 -lgio-2.0 -lpangoft2-1.0 -lgdk_pixbuf-2.0 -lpangocairo-1.0 -lcairo -lpango-1.0 -lfreetype -lfontconfig -lgobject-2.0 -lgmodule-2.0 -lglib-2.0   -pthread -lthunar-vfs-1 -lexo-0.3 -lgthread-2.0 -lrt -lgtk-x11-2.0 -lxfce4util -lgdk-x11-2.0 -latk-1.0 -lgio-2.0 -lpangoft2-1.0 -lgdk_pixbuf-2.0 -lpangocairo-1.0 -lcairo -lpango-1.0 -lfreetype -lfontconfig -lgobject-2.0 -lgmodule-2.0 -lglib-2.0   -lthunarx-1 -lgtk-x11-2.0 -lgdk-x11-2.0 -latk-1.0 -lgio-2.0 -lpangoft2-1.0 -lgdk_pixbuf-2.0 -lpangocairo-1.0 -lcairo -lpango-1.0 -lfreetype -lfontconfig -lgobject-2.0 -lgmodule-2.0 -lglib-2.0   -ldbus-glib-1 -ldbus-1 -lgobject-2.0 -lglib-2.0   
libtool: link: i686-pc-linux-gnu-gcc -I.. -I../common -DWNCK_I_KNOW_THIS_IS_UNSTABLE -DBINDIR=\"/usr/bin\" -DLOCALEDIR=\"/usr/share/locale\" -DDATADIR=\"/usr/share\" -DSYSCONFDIR=\"/etc\" -DXFCEMODDIR=\"/usr/lib/xfce4/modules\" -pthread -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/xfce4 -I/usr/include/gtk-2.0 -I/usr/lib/gtk-2.0/include -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/cairo -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12 -I/usr/include/atk-1.0 -I/usr/include/libwnck-1.0 -I/usr/include/pango-1.0 -I/usr/include/cairo -I/usr/include/startup-notification-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/gtk-2.0 -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0 -I/usr/include/xfce4/xfconf-0 -I/usr/include/dbus-1.0 -I/usr/lib/dbus-1.0/include -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -DEXO_API_SUBJECT_TO_CHANGE -I/usr/include/exo-0.3 -I/usr/include/gtk-2.0 -I/usr/include/xfce4 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0 -I/usr/include/cairo -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12 -DDBUS_API_SUBJECT_TO_CHANGE -pthread -I/usr/include/thunar-vfs-1 -I/usr/include/exo-0.3 -I/usr/include/gtk-2.0 -I/usr/include/xfce4 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0 -I/usr/include/cairo -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12 -I/usr/include/thunarx-1 -I/usr/include/gtk-2.0 -I/usr/lib/gtk-2.0/include -I/usr/include/atk-1.0 -I/usr/include/cairo -I/usr/include/pango-1.0 -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -I/usr/include/pixman-1 -I/usr/include/freetype2 -I/usr/include/libpng12 -I/usr/include/dbus-1.0 -I/usr/lib/dbus-1.0/include -I/usr/include/glib-2.0 -I/usr/lib/glib-2.0/include -O3 -march=native -mtune=native -pipe -Wl,-O1 -o xfdesktop xfdesktop-main.o xfdesktop-menu.o xfdesktop-windowlist.o xfdesktop-xfce-backdrop.o xfdesktop-xfce-desktop.o xfdesktop-xfce-desktop-enum-types.o xfdesktop-xfdesktop-marshal.o xfdesktop-xfdesktop-icon.o xfdesktop-xfdesktop-icon-view.o xfdesktop-xfdesktop-icon-view-manager.o xfdesktop-xfdesktop-window-icon.o xfdesktop-xfdesktop-window-icon-manager.o xfdesktop-xfdesktop-clipboard-manager.o xfdesktop-xfdesktop-file-icon.o xfdesktop-xfdesktop-file-icon-manager.o xfdesktop-xfdesktop-file-properties-dialog.o xfdesktop-xfdesktop-file-utils.o xfdesktop-xfdesktop-regular-file-icon.o xfdesktop-xfdesktop-special-file-icon.o xfdesktop-xfdesktop-volume-icon.o -pthread -pthread -Wl,--export-dynamic  ../common/.libs/libxfdesktop.a ../common/.libs/libxfdesktop-menu.a /usr/lib/libxfcegui4.so /usr/lib/libwnck-1.so /usr/lib/libstartup-notification-1.so /usr/lib/libxcb-aux.so /usr/lib/libxcb-event.so /usr/lib/libxcb-atom.so /usr/lib/libxcb.so /usr/lib/libSM.so -luuid /usr/lib/libICE.so /usr/lib/libXRes.so /usr/lib/libXext.so /usr/lib/libxfconf-0.so /usr/lib/libthunar-vfs-1.so /usr/lib/libgamin-1.so /usr/lib/libjpeg.so /usr/lib/libexo-0.3.so /usr/lib/libgthread-2.0.so -lpthread -lrt /usr/lib/libxfce4util.so /usr/lib/libthunarx-1.so /usr/lib/libgtk-x11-2.0.so /usr/lib/libgdk-x11-2.0.so /usr/lib/libatk-1.0.so /usr/lib/libgdk_pixbuf-2.0.so /usr/lib/libgio-2.0.so /usr/lib/libpangocairo-1.0.so /usr/lib/libpangoft2-1.0.so /usr/lib/libcairo.so /usr/lib/libpixman-1.so /usr/lib/libpng12.so /usr/lib/libXrender.so /usr/lib/libX11.so /usr/lib/libXau.so /usr/lib/libXdmcp.so /usr/lib/libpango-1.0.so -lm /usr/lib/libfontconfig.so /usr/lib/libfreetype.so -lz /usr/lib/libexpat.so /usr/lib/libgmodule-2.0.so -ldl /usr/lib/libdbus-glib-1.so /usr/lib/libdbus-1.so /usr/lib/libgobject-2.0.so /usr/lib/libglib-2.0.so -pthread
xfdesktop-xfdesktop-file-properties-dialog.o: file not recognized: File truncated

"File truncated" usually means you ran out of disk space while building the app and the file didn't completely write to disk.  This is not a problem with xfdesktop's build system and has nothing to do with what locale you're using.