I recently fixed up a trackball that was acting up. The symptom was a jumping effect. When moving, it woudl skip back visually. First I replaced the sensor electronics, and nothing changed. It turned out that the metal wheels were slightly warped (moved a micrometer left/right while spinning).
To straighten them out (which fixed the problem) I used needle nose pliers while rotating them, bent them back and forth until they were straight.
Just thought I'd add this to this thread as I was about ready to replace the whole trackball myself not knowing what the problem was. I thought it might be the bearings seizing up or that it might be the electronics, but it was just the metal wheel not being true.
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- Ahigh