I bought the game back in June when it was still a paid app, but it was deleted due to issues with upgrading to iOS 5 and have only just recently reinstalled it.

When playing the game now, I noticed I now had to upgrade to the full version. As I had already paid for it before, I upgraded thinking it would recognize me as having already purchased the app, but instead I was charged for it again.

Shouldn't this upgrade have been free?

I would put a claim into apple!

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Xbox and Gamecenter GT: nullrygar

Dunno if it works, but maybe you could redownload your old version of the game from the "Purchases" section within the Appstore app. Might be worth a shot at least.