I bought this mouse when it first came out and experienced the same problems you describe. Ultimately all the cleaning in the world would not help, the mouse would not scroll down, only up.
I called Apple and they sent me a new one under my AppleCare policy on my iMac G5, even though it did NOT come with that machine but was purchased later. I have had no problems with it since, except that my hand tends to drift down a bit on the mouse and the left click becomes unreliable (acts like a right click). Moving my fingers back nearer the top of the mouse and it works fine.
A Look Back at Mighty Mouse