Yeah, you're probably right that its a grounding issue. The power supplies do not use the grounding pins. I've never seen a 5 or 12V power adapter use the grounding pin. Everything else should be grounded (except some lights, and other stuff that runs on 5-12V). Everything in my computer room runs on one 10AMP circut. 220V is the only thing you can get in Europe.

After thoroughly checking everything it looks like my KVM switch is dead. Luckily I have another, but its not as high end as the previous one.

The error was a ground one and it originated in the 5-port audio switch. I replugged the cables and it fixed itself.

I've switched out the KVM box to a Bellkin OmniView Pro. This model allows serial to PS/2 mouse translation, perfect for the 386 and Socket 4 machine. I find the translation working pretty good.

I use a Master View CS-104
It's bulky, and clunky, but it supports PS/2 and AT/Serial, and it matches my beige desktop/tower beasts.