Bluetooth Stopped Working on my iMac!

Question

My Hardware:
iMac Intel Core 2 Duo 2.33GHz
3GB RAM
Snow Leopard 10.6.2
The Bluetooth functionality of this computer stopped working. It doesn't recognize my previously paired wireless Mighty Mouse. Nor any other BT devices.
When I tried to change some settings with the BT icon up at the top edge of the screen, it does show that BT is "on". When I tried to manually connect my wireless mouse with the BT option screen it will not connect. I've also noticed something very unusual. If I got to run "System Preferences", I can access all of the various things I have in System Preferences, EXCEPT for Bluetooth. If I click on "Bluetooth" in System Preferences, I get the spinning beach ball and sys pref "hangs".
If I go to the top of my screen and click on the BT icon at the top edge, one of the option is to "Turn Bluetooth Off". (I thought I could click BT off and then back on again to see if it resets.) Yet despite clicking that, the BT status doesn't change. In other words, I can't turn it off, change settings or "do anything with it"! I have tried to use the "minus sign" to delete the previously paired Mighty Mouse and then to re-add it but the command (delete device) does not register.
I've never had problems with BT on this 3 year old iMac. However, what precipitated this problem was me trying to run Techtool Pro on the internal HD to "defrag" and optimize it. After running Techtool Pro, the computer wouldn't boot. Fortunately, I had a clone of my iMac's HD on a FireWire drive and cloned it back to the internal drive. However, since getting everything back up and running, BT has stopped working!!!
I've tried rebooting the machine, rebooting the machine after a 1 min power down, doing a PRAM(?) reset boot, etc. All to no avail.
Anyone with any ideas as to how to "reset" or troubleshoot this BT problem?
I have included below what "System Profiler" says about my current BT status:
Apple Bluetooth Software Version: 2.2.1f7
Hardware Settings:
CSR-bc4:
Address: 00-17-f2-a5-92-c0
Manufacturer: Cambridge Silicon Radio
Firmware Version: 1965
Bluetooth Power: On
Discoverable: Yes
HCI Version: 3 ($3)
HCI Revision: 1965 ($7ad)
LMP Version: 3 ($3)
LMP Subversion: 1965 ($7ad)
Device Type (Major): Miscellaneous
Device Type (Complete): Miscellaneous
Composite Class Of Device: 0 ($0)
Device Class (Major): 0 ($0)
Device Class (Minor): 0 ($0)
Service Class: 0 ($0)
Requires Authentication: No
Services:
Bluetooth File Transfer:
Folder other devices can browse: ~/Public
Requires Authentication: Yes
State: Enabled
Bluetooth File Exchange:
Folder for accepted items: ~/Documents
Requires Authentication: No
When receiving items: Prompt for each file
State: Enabled
Devices (Paired, Favorites, etc):
00-07-e0-42-9c-27:
Name: 00-07-e0-42-9c-27
Address: 00-07-e0-42-9c-27
Type: Unknown
Services:
Paired: No
Favorite: Yes
Connected: No
00-0f-86-0b-5c-7b:
Name: 00-0f-86-0b-5c-7b
Address: 00-0f-86-0b-5c-7b
Type: Unknown
Services:
Paired: No
Favorite: Yes
Connected: No
00-14-51-c3-6e-06:
Name: 00-14-51-c3-6e-06
Address: 00-14-51-c3-6e-06
Type: Unknown
Services:
Paired: Yes
Favorite: No
Connected: No
00-14-51-c4-73-93:
Name: 00-14-51-c4-73-93
Address: 00-14-51-c4-73-93
Type: Unknown
Services:
Paired: Yes
Favorite: No
Connected: No
Ken’s mouse #1:
Name: Ken’s mouse #1
Address: 00-14-51-c6-44-70
Type: Mouse
Firmware Version: 512
Services: Mighty Mouse
Paired: Yes
Favorite: No
Connected: No
Manufacturer: Broadcom ($2, $314)
KC’s keyboard:
Name: KC’s keyboard
Address: 00-0a-95-4a-c9-fe
Type: Keyboard
Firmware Version: 272
Services: Apple Wireless Keyboard
Paired: Yes
Favorite: No
Connected: No
Manufacturer: Broadcom ($1, $7b00)
Incoming Serial Ports:
Serial Port 1:
Name: Bluetooth-PDA-Sync
RFCOMM Channel: 3
Requires Authentication: No
Outgoing Serial Ports:
Serial Port 1:
Address:
Name: Bluetooth-Modem
RFCOMM Channel: 0
Requires Authentication: No

Answer 1

Yes, starting up from the Mac OS X installation is just a test. Don't go past Installer's first screen, although you can go up to the menu bar and run Disk Utility from under Utilities. That will give you more things to do with the mouse than just moving it around the screen.
Also, while you are in Disk Utility, you should go to the +First Aid+ tab and run +Repair Disk+ on your internal drive.
Then you can quit Disk Utility and Installer, and restart normally. Just to be thorough, once you are started up again normally, run Disk Utility and use +Repair Disk Permissions+. It probably won't help with this problem, but you never know... I would restart and try the Bluetooth one more time.
I assume if the BT mouse doesn't show up after the system boots off the OS install disc, this might suggest the iMac's BT hardware is faulty and might need replacement?
Possibly. I'm assuming an Apple Bluetooth mouse works when booted from the installation disc, since many Macs now only come with Bluetooth mice. But I'm not 100% sure.
Also, do you also use a Bluetooth keyboard? If that mouse is your only Bluetooth device, it is possible that the iMac is fine, and the mouse is malfunctioning. The batteries are not getting low? Even if they are strong, did you try taking the batteries out for a few minutes and putting them back in?
And what if I the BT mouse is functional after I boot up with the OS install disc? What might you suggest as the next step
If you have an external drive that can be erased, you can install a test system on that drive. Set the iMac to boot from that fresh system. See of Bluetooth is working properly. Otherwise, you will need to back up your data, then reinstall a fresh system on your internal drive.