I wish I had an answer but I have exactly the same problem. I even removed and then reinstalled the module, and the only thing that changed was the DesktopModuleId went from 54 to 61.
I tried removing all instances of the Media Module that I could and I then removed the Media Module and I got the following error:
EventQueue.ProcessMessage: Message Processing Failed
ProcessorType: DotNetNuke.Entities.Modules.EventMessageProcessor, DotNetNuke
Body:
Sender:
BusinessControllerClass: DotNetNuke.Modules.Media.MediaController, DotNetNuke.Modules.Media
DesktopModuleId: 54
UpgradeVersionsList: 03.02.00,03.02.03
ExceptionMessage: Value cannot be null. Parameter name: type
Server Name: LEADWEB2
I reinstalled the Media Module and now I get two errors:
EventQueue.ProcessMessage: Message Processing Failed
ProcessorType: DotNetNuke.Entities.Modules.EventMessageProcessor, DotNetNuke
Body:
Sender:
BusinessControllerClass: DotNetNuke.Modules.Media.MediaController, DotNetNuke.Modules.Media
DesktopModuleId: 54
UpgradeVersionsList: 03.02.00,03.02.03
ExceptionMessage: Object reference not set to an instance of an object.
Server Name: LEADWEB2
EventQueue.ProcessMessage: Message Processing Failed
ProcessorType: DotNetNuke.Entities.Modules.EventMessageProcessor, DotNetNuke
Body:
Sender:
BusinessControllerClass: DotNetNuke.Modules.Media.MediaController, DotNetNuke.Modules.Media
DesktopModuleId: 61
UpgradeVersionsList: 03.02.00,03.02.03
ExceptionMessage: Object reference not set to an instance of an object.
Server Name: DNNWEB2
I am running this installation in a webfarm, are you? I don't know if that makes any difference.