Same/similar problem here. HP BL460c, internal RAID used for ESX installation. Had 3.0.2, all patches installed, running just fine, used the 3.0-3.5 tarball to upgrade. Everything seemed fine, no disks anywhere near going full, no error messages during upgrade. After reboot, can't mount root. I figured the quickest solution for me was to do a clean 3.5 installation rather than trying to find out what went wrong. Feels more clean anyway, but of course a serious problem for those not having that option.
Clean 3.5 installation went fine, and it boots. Having some iSCSI problems now, but that is another story.. Back on 3.0.2 for now (I had mirrored disks so I could go back to 3.0.2 with minimal effort)