What did you do to upgrade? Did you install your distribution's latest gvim package in place of the same distribution's earlier gvim package? Did you build it yourself? Did you upgrade both gvim and vim?
If the upgrade didn't change your vimrc, then there is no reason to believe that changing your vimrc will fix the problem.
In a terminal, start gvim like this:
gvim -N -u NONE
That will ignore all of your configuration files. Copy some text from somewhere, move your mouse to the gvim window and click the middle mouse button. It should paste whatever you copied. If it didn't, there is something wrong with your build of gvim. Clues may be found in the output of
If the paste did work, then the problem is in your configuration. Make sure when you run gvim normally that
:verbose set mouse?
prints "mouse=a". If it doesn't, it will tell you where the value of the 'mouse' option is being changed.
To verify that gvim is seeing your middle mouse click, you can put gvim into insert mode (e.g., type
o) then type Ctrl-V and click the middle mouse button. Gvim should insert the text "<MiddleMouse>".
If that doesn't reveal the problem, let me know the results and we'll go from there.