I recently came across this error message after upgrading from 2003 > 2007 > 2010.
Note: SP/PS2010 version is at June 2012 CU (v6123) patch level.
- Ensure Project Server Service is running. Check within SP Central Admin.
- Run the SharePoint configuration wizard to ensure all the DBs in the farm are upgraded correctly and are at the same version/patch level.
- Re-boot the server(s)
Voila!! Your system will up and running.