Hi guys, just dealt with this problem and wanted to know what you thought:
Customer has PS/2 mouse that won't work (vertical won't work).
Sell customer used PS/2 mouse - 5 bucks
Customer's new mouse (that you tested in the store in front of him) doesn't work
Customer (meanwhile) buys new memory on your advice (just for performance, not to fix the mouse) updating from 128MB to 1GB, running XP and installs it himself.
Customer troubleshoots mouse over phone - it won't even work in safe mode, it refuses to work - XP drivers uninstalled / reinstalled, sfc /scannow run, still no dice.
Customer takes computer to you to fix troubled mouse.
You try to power on the computer - no video
Unplug all peripherals, add-on cards, and disk drives, still no video
Turns out to be: Bad power supply. Mouse works fine now.

EDIT: And all voltages on the old P/S were within tolerance and the power good signal is fine. Tested with a power supply tester. I just threw it on a new P/S for the heck of it and everything started working again.