gistfile1.cs

private void Form1_Load(object sender, EventArgs e) {
    var down = Observable.FromEvent<MouseEventArgs>(this, "MouseDown");
    var move = Observable.FromEvent<MouseEventArgs>(this, "MouseMove");
    var up = Observable.FromEvent<MouseEventArgs>(this, "MouseUp");

    var diff = move
        .SkipUntil(down)
        .TakeUntil(up)
        .Let(m => m.Zip(m.Skip(1), (l, r) => new { Left = l, Right = r }))
        .Repeat()
    ;

    Graphics g = this.CreateGraphics();
    diff.Subscribe(d => g.DrawLine(Pens.Blue, d.Left.EventArgs.Location, d.Right.EventArgs.Location));
}