I think that problem is caused by wrong FOV
either you installed old Oblivion Reloaded (OBGE 3)
or .. any mods that modify FOV and not setting it up correctly
by default FOV for Oblivion is 75 (you can see it in Oblivion ini file)
Oblivion Reloaded change that FOV to 90
in OBGE 3 this feature can cause the wrong pointing cursor issue in menu (Darn UI series)
just because FOV in game mode and menu mode is different
to investigate
you must know which is which mod that modify your FOV, either OBGE v3 or something else
there is several mods that modify FOV in-game ...
if you using OBGE 3, just change the fov setting to 75 and you should good to go~~