BT Setup Assistant Hangs Machine - I use USB

My wife uses a first generation MacPro tower, running Snow Leopard. It has been working fine till yesterday, when on Startup the Bluetooth Setup Assistant comes up searching for a wireless keyboard or trackpad - even though we have always used an Apple USB keyboard and mouse.

The forums tell me to disable the Setup Assistant -- BUT my USB mouse and keyboard do not function while the Setup Asst. is running. It keeps running and running, the Continue button is greyed-out and I cannot move the cursor at all. I can hear the drive working, but I cannot choose anything.

I have rebooted using the power key, replugged the keyboard and mouse, tried each USB port, tried different keyboard and mice -- all to no avail. Whenever the machine boots, the BT Setup assisstant comes up and renders the machine inoperable.

I cannot boot from the System Disk because the disk tray cannot be opened since the keyboard doesn't work (unless there is a manual way to open the tray I am not aware of).

Any help?