Okay, here is an update on what I've tried to get this issue solved. As of now, none of it has worked for me
- reset PRAM
- clean reinstall 10.8
- uninstall and update Wacom drivers
- update Adobe software
- update to 10.8.4
- update Java to latest version
- search for active processes that may be causing an issue
- update flash
- safe boot (problem still occurs in safe boot mode.)
- contact AppleCare (no solution)
- change accessibility setting for cursor size
- contact Adobe (they blame it on Apple)
- went through all the other suggestions on this thread that looked promising.
I really don't want to switch to a Windows machine for my work, but I spend at about eight hours a day in photoshop and have taken a hit in my productivity because of this vanishing cursor problem.
I'll post again if I find anything that helps.