Darius you're the man! It took a little while to revert my snapshot to lion and then update vmware tools before upgrading to 10.8.
You were absolutely correct the VM boots fine and the culprit was outdated vmware tools! Thank you so much for your swift help and communication!
By the way maybe it would be possible in a future Fusion update to have some sort of tool that notifies the user about updating vmware tools before upgrading the OS to avoid this type of scenario. Maybe it's too complicated but just a suggestion!
Thanks again!