Before I try GNOME desktop, I tried some additional things:

1) From the Ctrl_Alt+F1 terminal console, running 'sudo systemctl
restart lightdm' restarts my desktop environment and everything is ok
until a few minutes idle time causes the problem again.

2) In the Xfce desktop panel I removed the Power Manager Plugin. I also used 
'ps -ef | grep power' to identify the xfce4-power-manager process id, and 
killed it with sudo kill, such that no xfce4 power management processes are 
listed by ps.
After allowing many minutes of idle time, the problem does *not* occur.

3) I booted into the default desktop environment from the bootable
Xubuntu 20.04.1 LTS USB stick (the same stick I installed from back in
May 2020). The problem doesn't occur, even though xfce4-power-manager is
running.

Does this give any further clues?

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https://bugs.launchpad.net/bugs/1912670

Title:
  Mouse buttons and keyboard unresponsive after idle time

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