Don't think I can help, but just to be sure... did you rebooted PROXMOX after the upgrade? I mean, now you are running version 3? (pveversion -v)
If so, check the storage to find the vmdk file (btw, you'd better use native kvm formats, like qcow2 or raw) an be sure is really there. Check the vm configuration to check if is pointing to it or not. Are you using non standard filename for the vmdk? Mabe 3.x is less tolerant on this regard, if so rename and change config accordantly