I managed to fix the problem by using my old web.config file as well.
Yes, it's probably a dumb thing to do, but it works, and if the documentation doesn't tell us EVERYTHING we need to copy from the old web.config to the new one it's very difficult to troubleshoot.
I followed the upgrade instructions each time, (copying SQL strings, keys etc) over to the new file, but despite this it didnt work.
FYI the upgrade on the db ran flawlessly, no errors reported. However trying to browse to the portal site after the upgrade completed reulted in the OP's error message.
My portal now runs fine, but using the OLD web.config file too.
I know a small amount of scripting and the web.config file is beyond my abilities to troubleshoot where the error might be.
Clearer comments in the web.config file and spacing out portions would be nice, also be nice if ALL user configurable items were kept in one chunk.
My two cents :)