No solution, but a probable cause. MS Update downloaded and installed Office
2007 SP1 on 13 March causing a break in my work using MS Word. When I
returned to MS Word after the SP installation had finished and had re-booted
my computer (without asking me) I had, and still have, the same problem as
you and in addition MS Word crashes on exit and goes into an endless loop of
trying to recover from that crash. MS Word is now almost unusable!
See the article above "Mouse stopped working in Word 2007". It worked for me.
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