Well, you might try changing the device to /dev/mouse instead of /dev/psaux. Your protocol is OK because I am running two mice: a ps2 and a usb and I am using the same protocol. Your device will probably be different than mine though. You can test to see if the device works by typing
, hit enter, then move your mouse around. If you get garbage on the screen, that's the mouse device. After that, just ctrl+c to kill the command and use whatever device worked as your mouse device. Hope this helped.