My mouse cursor is overshooting

After using three apple computers over the last 8 years, I've run into an issue that I've never seen before. The machine I've been running for about 3 years, a Power Mac G5, has been completely fine until 3 days ago. I've never had any (major) issues with it until then. I put it to sleep one night and when I woke it up the next day, the mouse cursor was overshooting.

A little background; I've been using the same mouse for 8 years with 2 of the machines (the other is a powerbook) that I've had in that time period. I've done a lot of design work and motion graphics, so I've come to be very familiar with my mouse and how it reacts to my movements on screen. When I turned my machine on the other day and began to work, I could tell something was very wrong. From the get-go my cursor would overshoot its target substantially, and then I would reverse the path to correct it and it would randomly accelerate, causing me to overshoot the target again. This happens every time I try to click or select something with my mouse.

Sometimes the cursor seems to accelerate randomly, other times it seems to get hung-up on buttons that I cross over on its way to click something else. When it gets stuck, it sling-shots at least an inch or two on screen beyond where I'm headed. I assumed at first that it was a mouse issue, that maybe the lens was dirty or that the mouse was just old. I cleaned it and plugged it back in. Still didn't work. Even though I had never changed my mouse control settings, I went in and tried to do some adjustments in System Settings. The same problem persisted. After that, I decided I needed to try different mice. I tried a total of 5 different mice from different manufacturers, all had the same problem. I tried all of them in every single USB port on the machine.

I went online and spent several hours googling similar problems. None of them exactly described the issue I have. Like I said, I have an intimate understanding of how my cursor flows, thus allowing me to use it as a paint brush to create as I've been doing for 8 years. When my mouse function stopped working, it was like chopping off an extension of my hand. Of all of the posts that I read, mostly people were having problems with lag or the cursor "vibrating." Many of them said that they tried different 3rd party software to control the mouse (i.e. Steer mouse) and I tried almost all of them, but it didn't fix the problem. Another thing people suggested was to upgrade to the newer OSX versions and that this resolved their mouse issues. However, I use a large library of pro software and I've heard horror stories from many of my associates that they wish they has stuck with Leopard because they've had so many issues with their pro apps when upgrading to Snow Leopard or Lion.

So now I'm dead in the water, I can't run my business, I've got a ton of work to get out by the end of the year and I can't do it. This problem has already cost me about $600 and I can't afford to spend any more to gamble on a software upgrade or to not be able to complete my work. This simple flaw is costing me a lot of money and a lot of business. Obviously, my question is "How do I fix this?" but secondly, my question is "How, after working perfectly for 3 years, does such an issue arise after I put my machine to sleep for 8 hours?"