The machineKey is used to encrypt passwords (among other things). You can not just generate a new machineKey because the new key will not be able to decrypt the previously stored passwords and you will be in the same boat you are in currently.
If you created a backup of your site files prior to upgrading, grab the custom machineKey out of the web.config file from your backup and put it in your current web.config.
If you don't have a backup, and your configuration allows resetting passwords, give that a try.
Let me know if that doesn't get you back into your site and I will post a detailed step-by-step on resetting your machineKey and resetting all passwords in your db to plaintext and then back to encrypted. This process will cause all passwords to be changed on your site but if you don't have the custom machineKey they were encrypted with, there is no other option really.