In an upgrade from Jenkins 1.487 to 1.500 the rekey operation fails due to being unable to rewrite the necessary files. This seems to be the same or similar to the issue resolved in JENKINS-16319, which was included in the Jenkins 1.500 release. I seem to be unable to upgrade beyond Jenkins 1.497, as this problem first occurred in an attempted upgrade from Jenkins 1.497 to 1.498. The re-key log is as follows:

Started re-keying Wed Jan 09 10:13:00 CST 2013
Scanning E:\Jenkins\config.xml
ERROR: Failed to rewrite E:\Jenkins\config.xml
java.io.IOException: Unable to delete E:\Jenkins\config.xml
at hudson.util.AtomicFileWriter.commit(AtomicFileWriter.java:112)
at hudson.util.SecretRewriter.rewrite(SecretRewriter.java:121)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:170)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:143)
at jenkins.security.RekeySecretAdminMonitor$RekeyThread.run(RekeySecretAdminMonitor.java:182)
Scanning E:\Jenkins\jobs\BuildAllFromTrunk\builds\2012-12-11_06-16-44\changelog.xml
Scanning E:\Jenkins\jobs\MakeCustomerService\builds\2012-12-15_06-40-38\changelog.xml
Scanning E:\Jenkins\jobs\MakeCustomerService\builds\2013-01-08_06-40-28\changelog.xml
Scanning E:\Jenkins\jobs\MakeFlash\builds\2012-12-29_07-07-22\build.xml
Scanning E:\Jenkins\jobs\MakeImageOne\builds\2012-12-18_10-16-06\changelog.xml
Scanning E:\Jenkins\jobs\MakeMsgProc\builds\2012-12-11_07-07-21\build.xml
Scanning E:\Jenkins\jobs\MakeMsgProc\builds\2013-01-03_05-35-18\build.xml
Scanning E:\Jenkins\jobs\MakePortal\builds\2012-12-20_07-21-50\changelog.xml
Scanning E:\Jenkins\jobs\MakePrintAndPopcorn\builds\2012-12-13_10-33-18\build.xml
Scanning E:\Jenkins\jobs\MakePrintAndPopcorn\builds\2013-01-05_07-07-37\build.xml
Scanning E:\Jenkins\jobs\MakeTools\builds\2012-12-19_06-41-33\changelog.xml
Scanning E:\Jenkins\jobs\MakeWeb\builds\2012-12-13_05-35-40\build.xml
Scanning E:\Jenkins\jobs\MakeWeb\builds\2013-01-05_05-34-53\build.xml
Scanning E:\Jenkins\jobs\RefreshBranchSourceCode\builds\2012-12-13_07-01-20\changelog.xml
Scanning E:\Jenkins\jobs\RefreshBranchSourceCode\builds\2012-12-15_07-01-41\changelog.xml
Scanning E:\Jenkins\jobs\RefreshBranchSourceCode\builds\2012-12-20_06-16-43\changelog.xml
Scanning E:\Jenkins\jobs\RefreshBranchSourceCode\builds\2012-12-27_07-01-46\changelog.xml
Scanning E:\Jenkins\jobs\RefreshBranchSourceCode\builds\2013-01-03_05-31-58\changelog.xml
Scanning E:\Jenkins\jobs\RefreshBranchSourceCode\builds\2013-01-08_05-31-46\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-11_06-16-45\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-13_06-01-10\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-14_06-48-53\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-15_07-01-37\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-18_07-00-54\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-20_06-16-38\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-24_09-27-10\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-28_05-31-39\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2012-12-30_06-16-41\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2013-01-03_05-59-52\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2013-01-05_06-48-03\changelog.xml
Scanning E:\Jenkins\jobs\UnregisterAllBranches\builds\2013-01-08_06-16-39\changelog.xml
ERROR: Failed to rewrite E:\Jenkins\proxy.xml
java.io.IOException: Unable to delete E:\Jenkins\proxy.xml
at hudson.util.AtomicFileWriter.commit(AtomicFileWriter.java:112)
at hudson.util.SecretRewriter.rewrite(SecretRewriter.java:121)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:170)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:143)
at jenkins.security.RekeySecretAdminMonitor$RekeyThread.run(RekeySecretAdminMonitor.java:182)
ERROR: Failed to rewrite E:\Jenkins\users\agoldberg\config.xml
java.io.IOException: Unable to delete E:\Jenkins\users\agoldberg\config.xml
at hudson.util.AtomicFileWriter.commit(AtomicFileWriter.java:112)
at hudson.util.SecretRewriter.rewrite(SecretRewriter.java:121)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:170)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:182)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:182)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:143)
at jenkins.security.RekeySecretAdminMonitor$RekeyThread.run(RekeySecretAdminMonitor.java:182)
ERROR: Failed to rewrite E:\Jenkins\users\build\config.xml
java.io.IOException: Unable to delete E:\Jenkins\users\build\config.xml
at hudson.util.AtomicFileWriter.commit(AtomicFileWriter.java:112)
at hudson.util.SecretRewriter.rewrite(SecretRewriter.java:121)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:170)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:182)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:182)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:143)
at jenkins.security.RekeySecretAdminMonitor$RekeyThread.run(RekeySecretAdminMonitor.java:182)
ERROR: Failed to rewrite E:\Jenkins\users\dodren\config.xml
java.io.IOException: Unable to delete E:\Jenkins\users\dodren\config.xml
at hudson.util.AtomicFileWriter.commit(AtomicFileWriter.java:112)
at hudson.util.SecretRewriter.rewrite(SecretRewriter.java:121)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:170)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:182)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:182)
at hudson.util.SecretRewriter.rewriteRecursive(SecretRewriter.java:143)
at jenkins.security.RekeySecretAdminMonitor$RekeyThread.run(RekeySecretAdminMonitor.java:182)
Completed re-keying 0 files on Wed Jan 09 10:13:21 CST 2013