So, you have a USB mouse that works and also a PS2-Type mouse that doesn't? is that correct?
If that is correct, the only thing that I can think of is:
1.- you have plugged the PS2 mouse in the incorrect slot (where the keyboard has to be)
2.- Somehow, you have inserted the PS2 in the correct slot but inverted so it is there but not fully functioning?
3.- Disabled PS2 type mouse in your bios
Things I would try:
Turn off Computer, disconnect your USB & PS2 mouse, Start your PC and get into the Bios, find out if your PS2 port is Open (Enable) or Close (Disable), if the latter, Open it (Enable it). If you can't find anything in the Bios, save on Exit and turn computer off again. Unplug the power cord.
Plug in your PS2-Type mouse in the correct PS2 port, making sure it is inserted correctly, plug in your power cord and start your pc and let it get in into the desktop, if you have a problem at login screen, try to get to the desktop using your keyboard, wait a while as it may be installing the driver
Let us know what happens