When In-game (Any Dolphin game so far GameCube, Wii, WiiWare) I hit my pause button (Currently just set to the + key) and I get the issue. All other systems work fine, and it is only with Dolphin related systems. Like I said, I am sure its a display issue since the game actually pauses and shows the mouse, but I an not versed enough to identify what it could be. I am still going over settings, but nothing has jumped out at me (all systems are set to global so I am going over them).
I upgraded to 5.0 when I switched to RL if that makes a difference.