For now I just use the standard Debian kernel package from woody. And,
while following your pointer I even tried booting with the old kernel, under
which the mouse was working fine before I did the upgrade. But even with
the old kernel the mouse didn't start working, and there's still no IRQ line
for it in /proc/interrupts.
BIOS on the machine looks pretty old, and doesn't contain any ps/2 port
options. And also I tried booting into Windows on the same machine, and the
mouse is fine there, so I guess that rules out purely-hardware glitch. I'm
out of ideas again :(.