Also I have tried to create a new transition into a new workflow but get the same error.
If I export the workflow and import it into a new vault the workflow runs fine. It is just in the original vault I get the error
You sould get help from your VAR and upgrade from 2007-->2008->2009->2010>2011.
Thal will ensure thal all changes in the database for the upgrade where tested SWX dev team.
You can try this. In workflow copy the transition that causes problems and paste it. Save the workflow and try to make the transition.
I hope taht helps you.