This issue may occur if the ESX 3.5 host is still connected to the Inventory in a vCenter Server 2.5 instance.
To resolve this issue, you must remove it from the Inventory on the vCenter Server 2.5 instance and add it to the Inventory in vCenter Server 4.x or vCenter Server 5.0.
If your vCenter Server 2.5 instance is no longer available, see Configuring a legacy license server to manage ESX/ESXi 3.x hosts in vCenter Server 4.0 (1010704).