Help; My Site is blank suddenly

hi,
today i did some editing on my site. After i activated a theme, then suddenly the site went blank on white. I even cannot login to my wp-admin.
I had contacted my hosting admin and he/she said that my site could have been hacked..is it true? he suggested me to upgrade the wp version, but i got error like this on my fantastico:
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Upgrading…
Initializing Parameters – Done.

Upgrade failed
The database kafesya4_wrdp1 is not working properly and the creation of a database backup file has failed. Please contact the sysadmin for further assistance. Include this message for reference.
The initial installation has not been modified.
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how can i restore my site?
fyi, it is running on wp 2.7.
and i still can login to the cpanel though.

need your kind advise,
regards,
wiku