Is LW the only program you're having trouble with? Had you updated anything before this happened? What kind of mouse do you have?

As you found out, this is normally solved by reinstalling Java or deleting the prefs folder After you deleted LW's prefs folder, did you have to go through LW's setup wizard all over again & reset all your options?

Did you try an older version of Java? Try this one. Make sure to use the JRE offline installer & remove all other Java versions installed on your computer, before you install this version.
Archive: Download Java 2 Platform Standard Edition (J2SE) 5.0 Update 11