I've looked around and haven't seen this specific problem. My T-mobile 8320's trackball has learned the new trick of only working when the phone is in bright light!
The symptoms:
If the keyboard light is on, the trackball doesn't work.
If the keyboard light is off, the trackball works normally.
The trackball light never goes off, but stays at least dim even when the screen is blanked and the keyboard light is off. In fact, it is on even when the phone is in the holster!
The phone has never been abused, nor experienced water or anything.
I've done the battery pull to no avail, and played with the keyboard/trackball settings and the backlight settings with the same results.
T-Mobile says to try a master reset. I'll do that after I figure out what data is on my phone that will need replacing.
Has the phone been exposed to moisture at all? Have you tried cleaning the trackball? Or buying a new one (they're really cheap now)?
Never exposed to moisture, and I took the ball assembly out and it is very clean and the magnets rotate just fine. And, anyway, I've never heard of light-sensitive dirt!