Hi Russell,
I'm not sure exactly what is happening here, but you might try making sure that "Lock front panel until the event case for this event completes" in the event configuration is unchecked. It's also a good idea to watch your program execute with highlight execution turned on to see exactly where the VI is hanging on the second mouse click. I'm guessing that perhaps you need to include some error checking in the mouse up event in case the user hasn't done everything in the proper order.
If all else fails, post a simplified VI which replicates the problem and we'll take a look at it to see if there's a good workaround.
Good luck and let us know how it goes!
Megan B.
National Instruments