Error: 912, Severity: 21, State: 2
Microsoft has confirmed that this is a problem in the Microsoft products that are listed
This problem was first corrected in SQL Server 2008 Service Pack 1
The upgrade process includes a script to create the SP_Syspolicy_Create_Purge_job stored procedure. The procedure creates the syspolicy_purge_history job and hardcodes the owner of the job to be the sa account. Because the sa account is renamed, the job creation fails.
Workaround: recreate the sa account
Reference: FIX: Error message when you try to upgrade an instance of SQL Server 2005 to SQL Server 2008: "Wait on the Database Engine recovery handle failed. Check the SQL Server error log for potential causes"