...but have you considered that you have a problem with your USB hardware/controller? Was you mouse USB or PS/2? If your mouse was USB, then both of your hardware related issues were USB, probably on different ports. I have had similar issues with my cpmputers in the past, but nothing exactly like what you described. I have used every version of Knoppix since 3.7.

My first instinct was that your problem is in fact hardware related, and that perhaps your mouse, USB Flash Stick, and/or your USB hub/controller is damaged. Had you ever started your computer with that particular USB Flash Stick in that particular port before?

Sometimes Windows doesn't like to start up with alien memory devices. If it were a floppy disk, then you wouldn't have gotten that far. A virus can cause these symptoms, but that wouldn't explain how that left mouse button wouldn't work in Knoppix. Knoppix, or any live OS, cannot be affected by a virus.

If you have solved the problem, it would be nice to see how, exactly, so that others can benefit from the wisdom you have earned in this.