I encountered the same issue and the following solution worked for me:
http://www.sqlteam.com/forums/topic.asp?TOPIC_ID=123808
USE [<database>];
GO
OPEN MASTER KEY
DECRYPTION BY PASSWORD = <password>;
ALTER MASTER KEY
DROP ENCRYPTION BY SERVICE MASTER KEY;
ALTER MASTER KEY
ADD ENCRYPTION BY SERVICE MASTER KEY;
CLOSE MASTER KEY;
GO