@reinob, you are a genius! Reinstalling osso-af-utils has indeed got rid of the cursor. I also tried osso-icons-default but it pulled maemo-icons-203 which is what I had reinstalled before so no change there.

BTW the mystery of my strange apt-cache is solved! Trying to reinstall osso-af-utils with apt-get got me the same "cannot be downloaded" error as status-area-orientationlock-applet did before so I opened HAM, re-saved all the repos, did HAM update and that fixed the apt policy.