This is due to something (for me it wasCisco AnyConnect/Umbrella) taking over port 53.

First, disconnect from VPN and stop the cisco services:

You should stop all three. Then look at if a process is holding on to :53 in netstat:

netstat -aon | findstr ":53"

Then in an administrator powershell console run:

Stop-Process <<id of process above>>

Then restart docker desktop and all should work normally

System.InvalidOperationException: Failed to deploy distro docker-desktop · Issue #6640 · docker/for-win