Comment 26 for bug 335297

Grizzly, have you eliminated the possibility that it is one of the startup scripts in the multi-threaded boot that is killing your PS/2 mouse? e.g. Have you tried by-passing some of them by doing /etc/init.d/dbus start, /etc/init.d/hal start, startx from the recovery console? (You said earlier you got the problem within kde but I wasn't sure if you got there quite normally via auto-logon.)