I am using LV 7.1.
I discovered the problem. I have an application that uses a non-modal window "B" that starts up beside the first window "A" (B runs in parallel). I set my busy cursor in A and wait for the window B to finish loading (plus some other time-consuming initializations) and then I unset the busy cursor. The problem is that B gets the focus when it starts, while the mouse cursor is sitting idle over A. When I move the mouse, it notices that it's over window A where the "busy" was called, and changes to busy even though window A still does not have focus. Interesting!
To fix this, I just used the VI property "IsFrontMost" in A (after B starts loading). Problem solved.
-Dave