You mounted the trackball backwards. Flip it around.
Nope...  turning the trackball around 180degrees will result in the up/down axis getting reversed.  Somehow the lef/right leads are backwards.  I made my own mouse hack for my trackball, and did this exact thing by accident.  switch the pins for left/right, and voila it works fine.  If BOTH axis were moving the wrong way, then turning it around would fix it.
"when I move the ball up and down the cursor moves up and down ...
but when I move the ball left, the cursor goes right ?!?!  wtf?
and when I move the ball right, the cursor goes left ?!?!