I also found another issue, but it doesn't really warrant a new report.
If you double click right after entering xterm-mouse-mode, then you'll
see:

xterm-mouse-translate-1: Wrong type argument: number-or-marker-p, nil

This is because click-count isn't set to 1 when `xterm-mouse-last-click'
is first set in `xterm-mouse-event'.

Here's a patch: