Try upgrading the theme manually...
Well, downloaded the archive and FTP'd it to the server but no go. Trying to open the themes style.css in a text editor I get an error message about the character set not being recognized. Then I forced the editor to open it with ISO-8859-15 and it could. Saved it in UTF-8 and uploaded it again. After that the Dashboard > Updates stopped nagging about an update being available and the theme was accessible formt eh Themes section again. No further testing done but it seems to work again :)
...or contact the theme's author.
Thought I just did. I hoped he/she would be aware of this forum ;)