I have exactly the same problem.
Here is the log.. both P1 and P2 Lightgun are the same running on Demul. works fine on most other systems
15:41:13.865137 : -------------------- Program Start ----------------------
15:41:13.867132 : P1 device = \\?\HID#VID_0079&PID_1802&MI_01&Col01#9&208e33a0&0&0000#{378de44c-56ef-11d1-bc8c-00a0c91405dd}
15:41:13.869127 : P1 Device Handle = 65616
15:41:13.872100 : P2 device = \\?\HID#VID_0079&PID_1802&MI_01&Col01#a&1a4c87ee&0&0000#{378de44c-56ef-11d1-bc8c-00a0c91405dd}
15:41:13.874114 : P2 Device Handle = 593809
15:41:13.876108 : P3 device =
15:41:13.878109 : P3 Device Handle = 0
15:41:13.880098 : P4 device =
15:41:13.883094 : P4 Device Handle = 0
15:41:13.885084 : Cmdline arg 1 : -target=demul07a
15:41:13.887081 : Cmdline arg 2 : -rom=braveff
15:41:13.889074 : Cmdline arg 3 : -v
15:41:13.905034 : Waiting for hikarugame to hook.....
15:41:21.408488 : Attached to Process demul.exe, ProcessHandle = 1256
15:41:21.411487 : Demul.exe = 0x00400000, padDemul.dll = 0x10000000
15:41:21.428362 : MD5 hash of D:\New arcade build\Dreamcast lightgun\demul.exe = ce0a6fd5552903311a8935b6f60e26ad
15:41:21.430831 : MD5 Hash is corresponding to a known target = Demul 0.7a_180428
15:41:21.435801 : Adding CodeCave at : 0x0D2C0000
15:41:21.438249 : Hikaru Memory Hack complete !
15:41:21.440729 : -
15:41:45.751912 : RawData event for Device #2:
15:41:45.755356 : Device rawinput data (Hex) = [ 977F, FFFF ]
15:41:45.759357 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:45.761804 : OnScreen Cursor Position (Px) = [ 1136, 1079 ]
15:41:45.764781 : OnClient Cursor Position (Px) = [ 1136, 1079 ]
15:41:45.767790 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:45.770269 : Game Position (Hex) = [ 0097, 00FF ]
15:41:45.772243 : Game Position (Dec) = [ 151, 255 ]
15:41:45.774723 : MouseButton (Hex) = 0x0001
15:41:45.776686 : -
15:41:46.328283 : RawData event for Device #2:
15:41:46.331283 : Device rawinput data (Hex) = [ 977F, FFFF ]
15:41:46.333761 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.336220 : OnScreen Cursor Position (Px) = [ 1136, 1079 ]
15:41:46.338225 : OnClient Cursor Position (Px) = [ 1136, 1079 ]
15:41:46.340708 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.343163 : Game Position (Hex) = [ 0097, 00FF ]
15:41:46.345166 : Game Position (Dec) = [ 151, 255 ]
15:41:46.347788 : MouseButton (Hex) = 0x0002
15:41:46.349893 : -
15:41:46.595879 : RawData event for Device #2:
15:41:46.599868 : Device rawinput data (Hex) = [ 977F, FFFF ]
15:41:46.603320 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.605799 : OnScreen Cursor Position (Px) = [ 1136, 1079 ]
15:41:46.608809 : OnClient Cursor Position (Px) = [ 1136, 1079 ]
15:41:46.611279 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.613736 : Game Position (Hex) = [ 0097, 00FF ]
15:41:46.616712 : Game Position (Dec) = [ 151, 255 ]
15:41:46.619211 : MouseButton (Hex) = 0x0001
15:41:46.621690 : -
15:41:46.807870 : RawData event for Device #2:
15:41:46.811344 : Device rawinput data (Hex) = [ FFFF, 0000 ]
15:41:46.814320 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.816801 : OnScreen Cursor Position (Px) = [ 1919, 0 ]
15:41:46.819313 : OnClient Cursor Position (Px) = [ 1919, 0 ]
15:41:46.822257 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.824736 : Game Position (Hex) = [ 00FF, 0000 ]
15:41:46.827216 : Game Position (Dec) = [ 255, 0 ]
15:41:46.830191 : MouseButton (Hex) = 0x0000
15:41:46.832671 : -
15:41:46.835647 : RawData event for Device #2:
15:41:46.838164 : Device rawinput data (Hex) = [ FD7F, 0000 ]
15:41:46.840608 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.843087 : OnScreen Cursor Position (Px) = [ 1901, 0 ]
15:41:46.845568 : OnClient Cursor Position (Px) = [ 1901, 0 ]
15:41:46.848544 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.851042 : Game Position (Hex) = [ 00FC, 0000 ]
15:41:46.853504 : Game Position (Dec) = [ 252, 0 ]
15:41:46.855983 : MouseButton (Hex) = 0x0000
15:41:46.858464 : -
15:41:46.861220 : RawData event for Device #2:
15:41:46.863724 : Device rawinput data (Hex) = [ F87F, 0000 ]
15:41:46.866205 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.868684 : OnScreen Cursor Position (Px) = [ 1863, 0 ]
15:41:46.871525 : OnClient Cursor Position (Px) = [ 1863, 0 ]
15:41:46.874005 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.876988 : Game Position (Hex) = [ 00F7, 0000 ]
15:41:46.879461 : Game Position (Dec) = [ 247, 0 ]
15:41:46.881941 : MouseButton (Hex) = 0x0000
15:41:46.884451 : -
15:41:46.886901 : RawData event for Device #2:
15:41:46.889381 : Device rawinput data (Hex) = [ F47F, 0000 ]
15:41:46.891861 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.894341 : OnScreen Cursor Position (Px) = [ 1833, 0 ]
15:41:46.896821 : OnClient Cursor Position (Px) = [ 1833, 0 ]
15:41:46.899577 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.902059 : Game Position (Hex) = [ 00F3, 0000 ]
15:41:46.904542 : Game Position (Dec) = [ 243, 0 ]
15:41:46.907041 : MouseButton (Hex) = 0x0000
15:41:46.909518 : -
15:41:46.912475 : RawData event for Device #2:
15:41:46.914973 : Device rawinput data (Hex) = [ F0FF, 0000 ]
15:41:46.917453 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.920417 : OnScreen Cursor Position (Px) = [ 1807, 0 ]
15:41:46.922892 : OnClient Cursor Position (Px) = [ 1807, 0 ]
15:41:46.925392 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.927875 : Game Position (Hex) = [ 00F0, 0000 ]
15:41:46.930331 : Game Position (Dec) = [ 240, 0 ]
15:41:46.932811 : MouseButton (Hex) = 0x0000
15:41:46.935291 : -
15:41:46.937771 : RawData event for Device #2:
15:41:46.940251 : Device rawinput data (Hex) = [ EB7F, 0000 ]
15:41:46.942253 : PrimaryScreen Size (Px) = [ 1920x1080 ]
15:41:46.945113 : OnScreen Cursor Position (Px) = [ 1766, 0 ]
15:41:46.947595 : OnClient Cursor Position (Px) = [ 1766, 0 ]
15:41:46.950074 : Game client window resolution (Px) = [ 1920x1080 ]
15:41:46.952555 : Game Position (Hex) = [ 00EB, 0000 ]
15:41:46.955046 : Game Position (Dec) = [ 235, 0 ]
15:41:46.957537 : MouseButton (Hex) = 0x0000