The trackball not going right. Sounds like one of the bearing is sticking,or maybe the ball isn't making contact with it for some reason (something got down in the housing, etc). I'd say first thing would be to take it out, disassemble, blow it out and maybe put a little light oil on the bearings.
As for the led's. That's weird. I've never seen or heard of LED wiz's "turning on" led's in any way unless they were told to by some software that was loaded. Definitely check the startup group for any thing that looks out of place.
LEDBlinky's up to V5, but the latest stuff is paid (but the price is very reasonable, and worth it). With the latest version, it's trivially easy to test out each LED port to verify what's working and what's not. Though, as I recall, even the earlier free versions I started with were pretty straightforward to test the LEDs with.
IF you unplug the LEDWIZ and replug it to a USB port, do you hear the USB "Dong" sounds that a new device is disconnected/connected?