The mouse works in debian, on the same computer, and it was working in ubuntu and it just stopped. Rebooting had no effect. I'm using vervet.
I Had the problem where the mouse stopped just before the prompt appear for ubuntu login.
In my company we encountered the problem on three similar Dell desktop machine, so we suspected a driver problem. After some search we managed to solve the problem temporarily by removing/installing graphic driver, but after some time the problem came back.
In the end my colleague changed distribution, and I bypassed the problem by using an old version of the kernel: 3.13.0-46-generic. (you can select it in the bootloader using advanced ubuntu choice)
Since the problem came after an update, I think it's more a linux problem but didn't find any explaination in this area. I just hope they fix it in next version...