Weird mouse issue with OS X 10.7.4 on 21" iMac
I've occasionally had problems over the years with weird mouse issues, and bar once, they were all fixed by deleting the "com.apple.driver.AppleHIDMouse" file located in ~user\Library\Preferences. Upon reboot the file will be recreated, and you can bak it up first in case it changes something. Software updates can sometimes change/corrupt plist files, and deleting them to fix issues is fairly common.

Worth a try if you're struggling for a fix.