I know this questions is a year old, but it still seems to be unanswered.
I think your problem is that you just trigger xte 'key Control_L', which will just "tap" your control key, meaning the keypress is only emulated for a very short amount of time and then the key is released. You need to issue a keydown event when you start pressing the mouse button and fire a keyup event when you release the mouse button. Your .xbindkeysrc should look like this:
Best Answer
This is always what I've done. it works a peach for every trackman I've ever used. It's the last, simplest step from the official ubuntu page.
~/trackman.sh
:then, whenever you login (or in a startup script),
bash ~/trackman.sh
Done. This tiny little scripts works much, much better than the official ~60mb windows installer IMHO :)