Create New item in a custom list leads to "Unknown error"

Last week we had a nasty problem. In a custom list of a custom site, new items were not getting created. The "new form" aspx was customized as well. When you click new item (it was a custom content type also)  SharePoint gave a big nice "Unknown error" screen.

we discovered two anomalies:

1. the first thing I got suspicious was the item count. Sharepoint hard limits are really annoying..I was right about getting suspicioous over item count,  we deleted some of items from the list, the error vanished! But the list had to grow..

2. When you sign on as the "Site Collection Administrator" magically, you have no errors, everything worked fine. It does not even work when you have the full control permission level on list or site..Just being in "site collection administrators" group keeps the error away.

We dig the ULS and found out that kind of errors:

"Application error when access /_layouts/unit/forms.aspx, Error=Must declare the table variable "@_scopeTbl".  Must declare the table variable "@_scopeTbl".  Incorrect syntax near the keyword 'with'. If this statement is a common table expression or an xmlnamespaces clause, the previous statement must be terminated with a semicolon.  Incorrect syntax near the keyword 'with'. If this statement is a common table expression or an xmlnamespaces clause, the previous statement must be terminated with a semicolon.  Incorrect syntax near the keyword 'with'. If this statement is a common table expression or an xmlnamespaces clause, the previous statement must be terminated with a semicolon.  Incorrect syntax near the keyword 'with'. If this statement is a common table expression or an xmlnamespaces clause, the previous statement must be terminated with a semicolon.   at System.Data.SqlClient.SqlConnection.OnError(SqlException exception, Boolean breakConnection)     at..........................."


So after a quick googling, I found that cumulative update: http://support.microsoft.com/kb/973410
(Windows SharePoint Services 3.0 Cumulative Update Server Hotfix Package)
Although it seems to be curing the render failed error messages.

I never liked patching my farm on place, if we have custom development on it .. I usually do install a new farm, attach content db, and upgrade. Then  re-deploy the custom solutions on it...

I did this in order again and the Cumulative update really worked for the problem but unfortunately, It caused other things to crash... Now some of the custom built workflows are not working and its a complete pain to seek a way to fix them.