Finder/Cursor problems

Running iMac and Lion. Have had start-up problems since I started with Lion.

But this is new. Cursor is jumping and flashing on and off. Menu bar items can be viewed but cannot drag cursor down to select item. Pointing and selecting works intermittently. I have tried three different mouses (two wired and one wireless) and it doesn't seem to make any difference.

Any ideas?

Try to repair the hard drive:
Restart, and press and hold option after the gong sound. Select the recovery partition to start from. Then Do Not Reinstall (yet) but use Disk Utility to repair the hard drive.

If that doesn't work, I'd start to suspect something more serious, and take it to the Apple Store.

Thanks for the suggestion.

Have already checked out drive (Verified - no repair needed). I repaired permissions. I restarted from original install disk and repaired permissions again. I zapped PRAM. Basically nothing has changed.

I am thinking it must be hardware problem. Do you agree?

It may be a hardware problem but try this first....

Create a test account, give it admin permissions. Log off and then log on to the new test account. Is the same thing happening?