And the answer was........boot with Windows 8.1 setup disk (had to allow legacy hardware in BIOS), and ran system restore from 12/10/15 - which was before the Windows updates. Took a little while. When complete, started up fine and keyboard and mouse worked. Installed 11 Windows updates and still fine. Upgraded Avast and still fine. Must have been a corrupt file(USB driver?), because several reboots and still fine. Created another Restore point for today after everything updated and working well.