I have the same problem upgrading from 8.1 to 8.3 in lenny.
---------------------------------------------------------
# pg_upgradecluster 8.1 main
....
pg_restore: [archiver (db)] Error while PROCESSING TOC:
pg_restore: [archiver (db)] Error from TOC entry 1677; 1262 25497 DATABASE
teamspot art
pg_restore: [archiver (db)] could not execute query: ERROR: encoding UTF8
does not match server's locale en_US
DETAIL: The server's LC_CTYPE setting requires encoding LATIN1.
Command was:
CREATE DATABASE teamspot WITH TEMPLATE = template0 ENCODING = 'UTF8';
....
---------------------------------------------------------
# locale
LANG=en_US.UTF-8
LC_CTYPE=en_US.UTF-8
LC_NUMERIC="en_US.UTF-8"
LC_TIME="en_US.UTF-8"
LC_COLLATE="en_US.UTF-8"
LC_MONETARY="en_US.UTF-8"
LC_MESSAGES="en_US.UTF-8"
LC_PAPER="en_US.UTF-8"
LC_NAME="en_US.UTF-8"
LC_ADDRESS="en_US.UTF-8"
LC_TELEPHONE="en_US.UTF-8"
LC_MEASUREMENT="en_US.UTF-8"
LC_IDENTIFICATION="en_US.UTF-8"
LC_ALL=
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