This is definitvely related to the nvidia drivers and gnome 3.18+, at least in 
my case. Disabled nvidia drivers and gnome3 works great. See here for more 
detail:
https://askubuntu.com/questions/790347/mouse-stops-working-in-ubuntu-gnome-16-04/805145?noredirect=1#comment1217490_805145

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https://bugs.launchpad.net/bugs/1595690

Title:
  Mouse freezes on login to gnome desktop

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