Fabric Manager 3.1.(3a) Problem with local install - unable to connect

Hi All

I have the local instal of Fabric Manager installed on my PC. It has been working fine but since last week something has failed and I am unable to connect to the local database (not Oracle or PostgreSQL)

The error in the FMpersist.log is
[Server@1a1c887]: Initiating startup sequence...
[Server@1a1c887]: Server socket opened successfully in 10 ms.
[Server@1a1c887]: [Thread[HSQLDB Server @1a1c887,5,main]]: Database [ index=0db=file:dbname, alias=] did not open: org.hsqldb.HsqlException: File input/output error dbname.backup java.io.EOFException: Unexpected end of ZLIB input stream
[Server@1a1c887]: [Thread[HSQLDB Server @1a1c887,5,main]]: run()/openDatabases():
[Server@1a1c887]: Initiating shutdown sequence...

and FMServer.log gives me a socket creation error as the Database is not up.
I have tried rebooting and also manually restarting the database service all with the same error.

Any ideas ??

Thanks

Steph