Apologies if you have already tried this, Mr Beavis, but I'd first try zapping the NVRAM (hold down command option p r keys while starting up (not restarting). Keep the keys depressed until the chimes sound threee times. THis may fix your naughty mouse.
(Intel based Mac startup key combinations are generally similar to those for PPC based macs, but you can find a listing at
http://docs.info.apple.com/article.html?artnum=303124 if you need to check.)
Its worth remembering too, that starting up with the shift key held down will boot you into "safe" mode , and run fsck, which does essentially the same thing as running Repair Disk from disk utility anyway.
Did you disconnect all peripherals except for the keyboard and mouse when booting to the DVD? Other USB or firewire devices may cause problems with the boot process and USB operation if they require drivers enabled to work properly.
Cheers
Rod