Microsoft Sidewinder X5 mouse cannot work outside active window

Well, long story short, i purchased a Microsoft Sidewinder X5 gaming mouse about 7 months ago, to replace an old Logitech iFeel that i'd used and loved for years. I was amazed by the responsiveness and feel of the mouse, not to mention it's functionality.

This last week, i volunteered to be the Audio/Visual Technician for a Boy Scout winter camp, and i brought most of my equipment with me, including the mouse (didn't have an alternative), and the poor thing suffered some abuse from being carried all over creation this week in the same pouch as my laptop (running Windows 7 Ultimate, and Ubuntu 10.04)

One of the programmable side buttons (normally assigned to the "back" function), had been jammed, and it's still stuck, with no obvious signs that it'd correct itself, or by pressing it firmly and repeatedly. Not only that, but the left-click was jammed until i clicked it once, and it corrected itself. I signed off the back button failure as punishment for bringing expensive equipment to a dangerous environment...

The mouse still works, but there's a problem. When i open ONE window through anything, (be it the desktop, start menu, taskbar, whatever), The mouse works fine, but only in that application. If i try to click anything else, the taskbar (thought it was an explorer.exe issue at first, actually), or another window beside the active one, it doesn't even register a click, right-click, or anything. 

I have done several tests, uninstalled the drivers and reinstalled them, but the deciding test was trying it in Linux. Now, before you all go on about Linux (and i'm in the ExpertZone, i know how you all hate Linux), the problem persists, but it even goes on to show me what it apparently is trying to do. 

Based on what linux showed me, and what i later tested in Windows, the mouse is trying to resize a window when it leaves it's borders. What's even more puzzling is that alt+tabbing over to a seperate window doesn't fix the error. Nothing will work unless i'm in the first window that was launched.

So, is this a hardware fault? Is it user-serviceable in any way? I hate having to send in hardware to get repaired, and I hardly doubt i have any form of warranty/coverage that covers accidental abuse. If the only problem is that the back button being mashed is jamming the other button signals, I will not hesitate to rip the mouse apart and correct the error. 

Help would be GREATLY appreciated.