I have had this issue happen multiple times on multiple versions of kvm
with both ubuntu and cantos.  I just the other day tried installing
win8.1 again for testing and ran across ruban's post.  this happens in
win10 as well and I think I had seen it in win7.

I reinstalled another win8 vm from a usb instead of an iso later that
day and realized that the mouse was working normally which surprised me.
I then manually installed the virtio nic driver.  the system still
worked normally.  I then installed the baloon driver and that make the
mouse stop working untill i pulled the flash drive.  after changing the
power settings the mouse would again start working with the flash drive.

I have always used virt manager for connecting to the servers and spice
for the display

** Changed in: qemu
       Status: Expired => Confirmed

** Changed in: qemu (Ubuntu)
       Status: Expired => Confirmed

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https://bugs.launchpad.net/bugs/1323758

Title:
  Mouse stops working when connected usb-storage-device

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