I worked with the OP over DM for quite a while and then setup a TV session. The root cause here is that ubuntu is the enemy of fog (bug). Then during the execution of the ALTER USER step in the link I provided below the password for the mysql root user became confused. We ran through the mysql root user password reset process to reset the password which worked. But the upgrade still failed to backup the current database. Long story short, there was a second background mysql process running causing the process the fog installer was managing to fail causing the backup of the database to fail. Once we found this back ground mysql process running we killed it and then restarted mysql. This time the install succeeded as designed.
Case closed.