Certain things seem to cause Vim7 to do go into some odd loop when the mouse moves the cursor into a different window. So far I've seen it when
1) I've got the command line edit window open, and the mouse moves the cursor to another window (usually happens when I switch away from Vim and back). Something is flashing non-stop in the lower right of the command line (probably some mouse string, but it's a bunch of unreadable chars). The input focus doesn't actually change away from the command edit window (typing stuff goes there). 2) when I have "tabline" set to my own function, it interacts with "taglist" and other specialized buffers (which have non-standard autocommands, among other things). Sometimes <C-C> will stop the looping until the mouse moves the cursor again. It might have something to do with the way Vim is re-setting the cursor position to the lower right of the screen sometimes, even though the input focus remains in the correct window.
