Ok, finally got this to work. I had to copy the mouse driver (mscvmd.386) to a floppy disk and then change the mouse to "COM1". After the change SETUP will search the driver in the floppy disk (putting the driver in C: or C:\WINDOWS did not work for me). It would seem copy of PCTMouse.exe is not needed. Do not know if this is the right way to do it. However not doing this and just using Left Amiga + P did not work for me either.
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