So with this Pi connected to an HDMI monitor, I can see the desktop, but neither the usb mouse nor keyboard do anything. Image 1 is a Jessie config.
If I put in a different image, the keyboard works (can't tell about the mouse because Image 2 is Volumio, a headless audio client that gives command line login prompt only to local monitor, no desktop but at least here the keyboard works whereas with Image 1, neither works). So it's not a hardware issue.
Back to Image 1 -- if I VNC to the desktop, I can mouse around and type all I want from the viewing computer. So Image 1 is not bricked.
Could there be something in the boot config of Image 1 (Jessie) that is switching off the local USB mouse & keyboard?