Sharepoint Foundation still limited to 4GB after doing a SQL 2008 R2 upgrade

I posted this to the SharePoint forum but they sugested I ask you guys.
I have a Sharepoint Foundation 2010 site that ran out of space (3.85 GB). I deleted some files and performed an inplace upgrade from SQL 2008 Express to SQL 2008 R2 Express. I thought all was good as I used "SharePoint Space Monitor" to confirm the available space was indead 10GB. But I am now getting errors
1827 CREATE DATABASE or ALTER DATABASE failed because the resulting cumulative database size would exceed your licensed limit of 4096 MB per database. and
3758 Database full error on SQL Server instance 'SPFOUNDATION\Sharepoint' in database ...