Fred:
...
> With xev, buttons 1 and 3 are correctly identified but the middle button
> is randomly assigned 4,5,6 or 7. Possibly this is the problem as I know
> the application is expecting button 2.

Maybe it is the desktop environment or the window manager that messes
this up.

Try installing and using fvwm1 or something of similar age instead of
what you are using currently and do the same test, or if you know how,
run bare Xorg.

///

It can also be the xserver config if you happens to have a xorg.conf
that is picked up by X. Configs like buttonmapping and things related
to emulateweel can mess this up. Look in man evdev (or man mousedrv).

 Look in your X11 log file for clues:
$ man xorg | grep -A8 ' -logfile'
       -logfile filename
               Use  the file called filename as the Xorg server log file.  The
               default log file when running as  root  is  /var/log/Xorg.n.log
               and  for  non root it is $XDG_DATA_HOME/xorg/Xorg.n.log where n
               is the display number of the Xorg server.  The default  may  be
               in  a  different  directory  on some platforms.  This option is
               only available when the server is run as root (i.e, with  real-
               uid 0).

Regards,
/Karl Hammar