I'm really not sure of the cause but just to check the obvious, have you tried switching around the USB ports that are being used? Have you tried the wheel with a different mouse?
I think you should be able to use the mouse with a PS2 adapter. Unfortunately I can't really test this theory as my PS2 adapters are ~60 miles away from where I am right now.
It sounds like it may be a USB power problem, I couldn't use my G25 wheel without it killing my internet connection. My fix was to get a new Hub which was less power hungry.
You may need to get a powered USB Hub but there's no guarantee this would work but they are not that dear.