Well, that just about rules out anything "normal" to check, as it looks like it's loading everything right and setup correctly.
A little (desparate) googling revealed a few things:
lkml.org suggests disabling "Legacy USB keyboard/mouse" support in the BIOS.
lists.debian.org seems to suggest that X might be picky with what kind of keyboard and possibly mouse settings you have (which may not make sense in your situation as it works with the olde kernel).
linuxforums.org seems to indicate a device issue. Check /dev/ for the /dev/psaux. If it doesn't exist then that's probably your problem. See if you can find mouse or input/mouse0 or something.
If you wanted to go through the trouble of finding which device it is (I don't have FC3 so I don't know), you could boot into single-user runlevel and just "cat" a device to see if it's working. For example, add a boot entry in LILO or GRUB which appends "-single" as part of a kernel parameter. Then it'll boot in single user mode (no GUI). You can log int and type:
at the prompt. Then move your mouse and you should see jibberish on the screen. If you don't, it's not getting any input from the mouse. Try a different device.
I hope that's not too confusing. I don't know what your level of knowledge is. I can elaborate more on any point if you need. I'm just kind of grabbing at straws and thinking of everything there is to check.
-- the dudeman