Comment 37 for bug 41427

reboot and the same thing happened.

this time I removed 1 peripheral file at a time and the problem (for me) is when you set the mouse to be left handed -- I don't recall changing the cursor size. Removing this file fixed it so my input (from keyboard) works. Here are the details:

~/.gconf/desktop/gnome/peripherals/mouse/%gconf.xml

<?xml version="1.0"?>
<gconf>
 <entry name="cursor_size" mtime="1280245614" type="int" value="18"/>
 <entry name="left_handed" mtime="1280245195" type="bool" value="true"/>
</gconf>