I've had the same problem.
Level 37, 5 council members found, Aleroth and Dark Forest explored, joined Thief Guild and Warrior Guild, acquired a nice Holy Sword.
Installed patch ... game over.
I was in Verdistis, went to give Hugh the grain order and the map was black with flags on it. Checked the sewer and that was black. Checked the Forest and ... well, I'm sure you get the idea. Verdistis map was OK. The teleporters were still active. Monsters were dead. Chests, doors etc reset - including the game killer which was the council chamber doors being locked.
Oh well, maybe I'll start again in a couple of months ...
