After fighting upstairs in the Dracogen Inn, I went back over the bridge and talked to the Elf on the bank. I then started a fight with
him and his friends and slaughtered them all without mercy. After the fight however, I began to loot the corpses but my cursor refused to return to normal.
Instead it stays as the 'Sword' icon to attack people. It also would not let me drag a box over my party to select them all.
1) Talk to the smug Elf on the River Bank
2) Start the fight with the diologue option
3) Begin slaughtering said Elf and his party
4) Once victorious, start collecting loot
5) See that the cursor is still up for a fight and displays a sword icon.
I expect my mouse to adhere to my commands and select my party for further adventuring. There will be more for it to fight along the way I'm sure.