I doubt DirectX is the problem. Try searching for the program "DxDiag.exe" in your Windows folder and run it. That program will tell you if DirectX is broken on your system.
Try reducing your JIT cache to zero. On my system, JIT does some really nasty stuff which screws up system timers and the clock and renders WorkBench unusable. I'm still trying to figure it out. Maybe it's a graphics sync problem.
On the "Display" tab, try re-detecting your 16-bit graphics format. WinUAE is really fussy about this. But then, WinUAE is pretty buggy, in general, and lots of things will break the GUI (F12 key).
On the "I/O Ports" tab, make sure "Shared" is disabled. You should at least be able to use the keyboard! If not, I have no clue. :-?