How do I take the mouse's moving position and convert it to world position?

Ah I see a couple of issues.
This needs to be set again afterwards, or it will always run constantly. If this messes your mouse movement up, just change it back.

We need to add the world direction x 10000 to the original world location for the end point.

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Okay. Give that a try, that should make it exactly where the mouse is.

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