http://moodle.org/mod/forum/discuss.php?d=61926

The upgrade process handled by mod\quiz\db\mysql.php fails without giving proper feedback.

The critical line (#890) is:
$success = $success && execute_sql("UPDATE {$CFG->prefix}quiz_questions SET defaultgrade = '0' WHERE qtype = '".DESCRIPTION."'", false);

as a hotfix, change it to:
$success = $success && execute_sql("UPDATE {$CFG->prefix}quiz_questions SET defaultgrade = '0' WHERE qtype = '7'", false);

The script uses new qtype constant when it should use the old number codes.

Alternatively, as a hotfix, you can comment out the whole IF:
if ($success && $oldversion < 2006021101)
since the comment says its not necessary

I am also attaching version of mysql.php, that worked for me. Note that the constant is present on more places.

-Pavel