had the same problem i fix it by adding the MachineValidationKey en the MachineDecryptionKey

from the original web.config to the new web.config or release.config

hope this helps,Sander

the only thing else i did was copy the lines of code where my database is registerd

<add name="SiteSqlServer" connectionString="Server=server;Database=database;uid=user;pwd=password;" providerName="System.Data.SqlClient"/>

from my old webconfig

but there is something else you could try.

try adding the objectqualifier from this post http://www.dotnetnuke.com/Community/ForumsDotNetNuke/tabid/795/forumid/107/threadid/45348/scope/posts/Default.aspx

  <data defaultProvider="SqlDataProvider">
      <providers>
        <clear />
        <add name="SqlDataProvider" type="DotNetNuke.Data.SqlDataProvider, DotNetNuke.SqlDataProvider" connectionStringName="SiteSqlServer" upgradeConnectionString="" providerPath="~\Providers\DataProviders\SqlDataProvider\" objectQualifier="" databaseOwner="dbo" />
      </providers>
    </data>

hope this helps

Sander

[Note Added Later: Please see my next post below before using these instructions. - Tikkune]

Sander: thanks for pointing me to the Shaun Walker post:

http://www.dotnetnuke.com/Community/ForumsDotNetNuke/tabid/795/forumid/107/threadid/45348/scope/posts/Default.aspx

because after having the UPGRADE package fail again, and after reading Shaun's post, I decided to do a brand new INSTALL of 4.3.0, rather than upgrade (Shaun mentions this option).  Here's exactly what worked for me:

1) copied the full file/folder contents of my existing DNN 4.0.3 application to a temp/backup folder;
2) deleted everything in my DNN 4.0.3 application folder;
3) extracted the contents of the 4.3.0 INSTALL package into my (now empty) application folder;
4) * reset the ACL permissions on the DNN application folder/subfolders (and all child entries...);
5) browsed to the location of my DNN application (localhost/dnn) to start the 4.3.0 installation;
6) fresh installation of 4.3.0 completed successfully; closed the browser immediately (did not access portal);
7) opened the 4.0.3 web.config file (temp folder) and copied to paste buffer the Validation and Decryption KEYS;
8) opened the 4.3.0 web.config file and pasted my Validation and Decryption KEYS over the default KEYS;
9) copied the contents of my existing \App_Data\ folder (the DNN database) over the 4.3.0 default database;
10) * reset the ACL permissions on the DNN application folder/subfolders (and all child entries...)
11) browsed to my DNN application,and UPGRADE started automatically;
12) upgrade completed successfully.

I could now login without errors, and I had upgraded from 4.0.3 to 4.3.0 successfully. :)

* (highlight your /dotnetnuke application folder, and right-click) > Sharing and Security... > Security [tab] >Advanced [button] > [x] Replace permission entries on all child objects with entries shown here that apply to child objects > Apply [button] > OK [button]