Up.

Could it be due to failing to load Kernel Modules?

no, dmesg should still be seeing something. are you sure you followed the procedure i outlined?

$ xinput

One of the gotchas with X is that most thing that runs under X has the SAME priority as X. Which can cause pauses in responsiveness. I tend to launch browsers and other PIG applications with a lower priority / nice level. So that when they misbehave I can terminate them without waiting for responsiveness to come back around.

$ nice -n 10 iceweasel

One other thing that can affect responsiveness is swap space. If you run out of ram and need it, but don't have it, your mouse will act weird, although it still moves (very slowly) for me. Add and use swap space if that's the case. Once you or your system has killed off enough processes to regain control of your remaining processes.

From your previous output seems interesting, implying adding i8042.nopnp to the list of kernel parameters.

$ sudo nano /etc/default/grub
$ sudo update-grub

$ sudo shutdown -r +0

Or use "e" in grubs menu to edit and try that change first before making it permanent and universal for grub.

Editing /etc/default/grub and running update-grub basically changes these types of lines in your grub.cfg. FILE: /boot/grub/grub.cfg