Ok, I'll copy my post from GoG, too:
Firstly, this is an excellent game, and I have very much enjoyed it thus far.
Raze_Larian: not a very common problem? Wrong. It will affect EVERY SINGLE PERSON who plays it for PC and uses inverted Y-axis controls for flying/character control - which is most people. Considering its recent Steam release, the number of people affected by this bug relative to the number of people who play it is huge.
Frankly, the fact that this exists is a little ridiculous. They remove the separate settings for Y-axis for On Foot and in Dragon Form, but don't properly test the functionality of the new, combined-effect option before releasing it (i.e. simply using it On Foot and in Dragon Form)? That's called poor programming (as testing is part of that process), and considering how long the base title has been out, it is inexcusable.
This is something which needs to be patched immediately, even if it's the only fix included in the update - this is a game-ruining bug. In my ~hour of searching for a fix, I've seen several people who cannot/refuse to continue playing upon discovering this bug, and frankly, I am... very disappointed. I was SO looking forward to attaining dragon form. I get there and it's basically unplayable for me. Considering the fact that this is an incredibly simple problem, I see no reason Larian can't release a small patch to address it.
Also, the inverter program you mentioned (Polynomial's) doesn't work for this problem. It inverts the cursor in Windows and in-game menus, but character control is unaffected by the third-party program. This needs to be fixed by Larian - a fix SHOULD already be in the works. To say that they're too busy to fix something as simple as this is, honestly, an excuse, and a poor one at that.
EDIT: I've done a lot of searching for another way to invert the mouse y-axis, but in Windows 7 64-bit, one's options are severly limited. Again, this is something which needs to be addressed by the company which created the software in question: Larian.
EDIT 2: I apologize if my tone is a little abrasive... it's just that this situation is incredibly disappointing/frustrating to me, made so by the fact that it's such a [small but] major piece of the game and there's nothing to be done except wait for a patch. And it's not even the kind of bug which is only a possibility and might not happen in certain circumstances (like Derk's Important NPC map marker getting stuck On (if you kill the farmer before delivering the letter, this happens)). It's a failure of our ability to effectively interact with a major part of the game, and it's unavoidable. It wouldn't be such a big deal if the game weren't so good otherwise. I really want to play it, but can't even finish the Battle Tower.
EDIT 3: I shouldn't say "can't", as I'd be lying. I am still trying to play, but flying is not a fun experience. If it is anything, it is frustrating. I've been playing with inverted Y-axis since Half-Life released 14 years ago. Playing with "normal" Y-axis is like playing with my monitor upside-down. "Duh," you might think, but imagine that. Possible, but not fun. On foot, though, things are awesome. I want to say that despite this, I am a fan, and Divine Divinity is one of my favorite games.