Cannot connect a re-installed instance of WSUS 3.0 to the SQL backend

[JSexton]

My install of WSUS 3.0 stopped synchronizing a few weeks ago. After some troubleshooting failed, I decided to try uninstalling and reinstalling. The uninstall had some issues, but I was able to solve them from other posts on this forum (thanks!). I specified keeping the logs and database files intact.

When attempting to run the 3.0 SP1 installer, however, it gets to the point where it asks to connect to the SQL backend. It connects and finds the old SQL database. However, it tells me that "the existing database is not compatible with this version of WSUS 3.0 SP1", and needs to be erased so a new one can be created. I'd rather not lose all that. I also tried running the 3.0 install without the service pack, and got the same result. (relevant portion of the WSUSSetup.og below)

Both servers are running Server 2003 Standard with SP2. The SQL server is runnign SQL Server 2005. It has Sharepoint databases on it, but the Application server does not. Sharepoint's been there while, though, not a recent change.

Any help you can give would be appreciated.

Log file:
2008-12-12 15:22:30 Success MWUSSetup Validating pre-requisites...
2008-12-12 15:22:31 Error MWUSSetup Failed to determine if an higher version of WSUS is installed. Assuming it is not... (Error 0x80070002: The system cannot find the file specified.)
2008-12-12 15:25:52 Error MWUSSetup CSetupDriver::LaunchSetup: Setup is cancelled or an error occurred (Error 0x80070642: User cancelled installation.)
2008-12-12 15:25:52 Success MWUSSetup User cancelled the setup
2008-12-12 15:25:53 Error MWUSSetup DoInstall: Wsus setup failed (Error 0x80070642: User cancelled installation.)