I've had all the same problems upgrading from 5.1.2 to 5.2.2. To set the SystemList field, run an update query on the Lists table in your db:

UPDATE Lists

SET SystemList = 1

WHERE ListName = 'xyz';  (replace xyz with the name of your list)

Once I did that, my custom profile property dropdown that uses my custom list 'xyz' is now populated correctly.

However:

1) when I navigate to "Lists" under the Host menu, my custom list is still not listed there (even if I click the Add List link). Any ideas how to get the list to show up?

2) when I go to Manage Profile Properties, I can edit my custom profile property, but the Length (maximum length for the property) is 0. Is that normal?

Thanks,

Joan