Mouse will not work in any mode but recovery

So... I have a computer which has no ps2 ports and only a usb keyboard and mouse. It is running windows 7 pro. After a microsoft update (in which the machine crashed due to a power hiccup) the mouse will not work in normal or safe mode, but the keyboard (which is usb as well) does. In recovery console, the mouse works just fine. I am assuming that is because it has its own mouse driver library. I have tried a restore but they are all broken. I can run a system disk and use a repair function, but this will uninstall all my software like autocad and will be more trouble than it is worth. I have tried everything I can think of with no success. Any ideas? Mind you the keyboard works, but no mouse and there is no ps2 port on the machine. Would device manager work... or is it a manual install of a good mouse library somehow.... I have also tried windows updates to see if the mouse showed up or fixed itself.... no good on that front. Everything else seems to function fine and all usb ports have been tested with good results... just no mouse recognition for mouse behavior.
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More about mouse work mode recovery
  1. 1. Remove Mouse.
    2. Boot to desktop, creates a new good config without the mouse driver loading.
    3. Restart to desktop.
    4. Wait for idle, plugin mouse.
    5. If Plug-N-Play gives a beep, it should reload mouse driver.
    6. Restart to create a new good config with working mouse driver.

    FYI, Windows creates a new good config after each successful boot.
  2. I did all of those steps and no good. I found out today when it happened again on a completely different machine that there is a problem in the latest windows 7 pro service pack that disables the mouse library. The only fixes are restore points (which did not work) or using the os disk that matches the version of yours and do a system repair... which in windows 7 apparently just repairs the damaged areas and does not require re-installation of any software that wasn't affected. I highly recommend turning off all auto updates if you have the pro version. The issue has happened 2 times in the last day to 2 different machines.... one being a lenovo thinkcenter and one being a dell xps. Microsoft has been notified about the issue. A high level Microsoft tech and I also ran an auto repair tool in the cmd window that searches for bad registry keys and drivers and tries to auto repair them... that didn't work... I am guessing it messed with the backup i386 image as well. The test detected bad keys but could not repair them (a proper os disk should do the trick... waiting on an open one with a new key to be sent free of charge... thanks to Microsoft). That alone should tell anyone who has dealt directly with Microsoft that it is probably a critical mistake on their end.
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