How to have favicon / icon set when bookmarklet dragged to toolbar?

Here is how you can do this:

1. Drag you bookmarklet to Bookmarks Bar.
2. Next to it create a bookmark of a site which favicon you want to use for your bookmarklet.
3. Open Bookmarks Manager, click Organize dropdown, and select Export, save your bookmarks as html file.
4. Open that html file in text editor.
5. Find the bookmark you just created, lets say its Gmail bookmark, you should have an html code for it, that looks like this:

<DT><A HREF="http://mail.google.com/mail/u/0/#inbox" ICON="data:image/png;base64,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">Gmail</A>

6. Copy the entire ICON tag
7. In the same file find the bookmarklet you created, and insert the ICON tag you copied into your bookmarklet tag:

<DT><A HREF="https://stackoverflow.com/questions/521040/javascript:(function(){... bookmarklet JS code...})();" ICON="data:image/png;base64,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">MyBookmarklet</A>

8. Save this file
9. Return to Chrom Bookmarks Manager, click again Organize, and select Import
10. Import HTML file you just edited, your bookmarklet now has a favicon.

Basically the procedure is to get ICON attribute of a bookmark tag and insert it into bookmarklet tag