Mouse freezes on start

[symphonia117]

I saw the reviews for amnesia, and even though it didn't look like a game I'd usually buy, I thought I'd try it out. After purchasing the game on steam during their holiday sale, I downloaded and attempted to play it. Whenever I initiate the game the screen gets goes black and then flips back to normal and the amnesia settings appear. I set everything to high with a screen resolution of 1920x1080. Then After I click to start playing the screen goes black again and,I can see fraps has started running as a 0 appears in the bottom. The screen remains like that for a few seconds then flips back to the desktop and the amnesia icon is still down at the bottom of the screen.
Steam is now up and encompassing my screen and my mouse is frozen up in the top left hand corner. It responds to right and left clicks but beyond that I cannot move it. After moving the mouse for a long period of time it occasionally allows me to move it across the screen for about a half of a second then flips right back up to the top left corner. I tried using a traditional mouse (I'm currently using a USB M18 gaming mouse from ligitech) and the same thing happened. The only way for me to exit amnesia is to open the task manager with CAD and use the keyboard to end the process. After amnesia.exe has been stopped, everything is normal and I can move my mouse again.

My graphics cards are the newest from Nvidia (for my card type).
I have a GIGABYTE nvidia gtx 460 w/ 1gb ddr5 ram overclocked to 845MHz. i7 875k cpu overclocked to 3.5GHz. 4gb of ddr3 1600mhz memory from g. skill.

Any ideas how to fix the mouse issue?
Here are the logs n stuff.