Problems with SharePoint security hot fix and Project Server 2007

I’ve been working on an installation of Project Server 2007 with SharePoint 2007 Enterprise Edition and recently tried installing the SharePoint security patch on our development environment. The problem is I was unable to complete the installation as the SharePoint Installation and Configuration Wizard fails with an error on step 8 or 9 (hard to say if it’s the end of step 8 or at the start of step 9).
The error dialog indicates that the configuration
"Failed to upgrade SharePoint Products and Technologies.
An exception of type
Microsoft.SharePoint.PostSetupConfiguration.PostSetupConfigurationTaskException
was thrown. Additional exception information: Failed to upgrade
SharePoint Products and Technologies."

There is a log refered to but after delving into it you find exactly the same exception message.
Has anyone else encountered this problem? Has anyone got any suggestions to work around it or resolve it as the project server instance no longer recognises the site collection it was installed under so I can’t provision workspaces for projects anymore.

 
I can’t find any references on the web to this problem and at the moment there are a whole host of associated problems caused by this. For example I cannot use STSADM.EXE to upload a new site template, PWA no longer recognises the Site Collection it exists within so I cannot create new workspaces for new projects.
I’ve tried re-running the wizard and it failes at the same place with the same error. At the moment the only way to fix this problem seems to be to reinstall everything from scratch!
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