Chosen Solution
Hi there! Working with a MacBook Air 13" Mid 2012. Trackpad and keyboard failure arose after minor water damage (water likely entered from ventilation holes as keyboard was covered with silicon protector): everything except the power button malfunctioned. Replaced the upper case cable and the problem was resolved until a week later, when the same failure recurred. Any diagnosis and recommended repairs welcomed. Thanks!
See how an external keyboard works, Examine the logic board of corrosion and try to determine the entry point. This sound like a keyboard entry despite the protection. UPDATE 6/4/16 Here’s where I originally ran into this issue and then the fix that worked for me: Trackpad Does not Function Properly
Check to see that there is no corrosion on the connectors or the cable, also it could be that the area actually failed now that it got power after the water damage.