With the developers help, a most responsive fellow, we determined it was my Microsoft 4000 wireless USB mouse that was being recognized as a gamepad for some reason. Actually, a Logitech wireless mouse I have as well is also being recognized as a gamepad.
When I use any number of wired mice they all work flawlessly. So still not sure what it going on completely (as why some folks can use wireless mice, but I cant) but it works so well with my Logitech wired mouse, I am happy!
upgraded to latest version of Shadowgun... not the gamestop one... and wireless mice work now. Must map fire and reload (#8 and #7) to left and right mouse buttons though in app.