when you configured the controls in MK3, did you do it under "this game" or "general"?
also, make sure you don't have a custom ini file for that game that specifically disables the mouse. i had that problem a while back, i had a few games where i had to disable the triple buffer option, so i had a custom .ini file for those roms, however, i made those before i enabled mouse support in mame, so mouse was set to 0 in those ini files....just something to think about.