Try restarting the console mouse services (/etc/rc.d/init.d/gpm restart). I know this *shouldn't* have anything to do with X11, but we had a RH9 box that would occasionally lose track of the mouse, and restarting GPM would fix it on that machine.
If it's a graphical workstation I DISABLE gpm.... most users (don't) use a console thus don't require a console mouse.
chkconfig gpm off
As also stated... remove as many modules NOT required.