I don't think the is any easy solution to this.
Enough users report problems converting CS3 files to CS5 and later that I no longer even attempt to open a CS3 .indd file in later versions if I intend to edit it. Instead I export from CS3 to .inx and update that in the new version. If you're lucky, conversion problems show up early, but most often they seem to appear when exporting to PDF or updating an index or some other task after a lot of editing has happened and it's too late to go back. Using the .inx method seems to be a lot more reliable.
Books are a special problem. I don't do tons of them, the last one started in CS4, but I did the revised edition in CS4 as well just becasue I was concerned there might be this kind of last minute problem. Do you use inter-doc cross-references? They are very flakey under the best of circumstances, and the limit your options now in some ways. In your shoes I'd try the following workflow:
Back up everything to a new safe location.
Export ALL of the individual files from your book to .idml, then open the .idml files one at a time and save as with the old names in hopes that any cross-refs won't break (sacrificing a goat to the x-refs gods won't hurt, either). This is not anywhere near as reliable as having exported .inx from CS3.
Add the newly saved files to a NEW book.
I just completed doing what you suggested and Woo Hoo! it worked!! Thank you for the info. I'm keeping my notes just in case I have this problem again. Can you still put in a word with the Adobe folks to look into this problem, and maybe they can have a downloadable update or something in the near future.
Again, it worked, I generated an updated index just fine! I do appreciate your help and all the other users that contribute to the help forum.
Thank you Peter
Did you sacrifice the goat?
Without reliably reproduceable cases I don't know what can be done. As I said, I changed my own behavior with updating files based on the reports from other users here. I never experienced a problem with any file I created myself, though most projects I do are not the sort that get rebuilt year after year so don't normally cross version boundaries (but I do have a few). While I certainly won't deny that a problem exists for some users, my instinct based on the frequncy of reports here, is that it's actually a fairly small number compared to the number of users who convert files and don't have a problem.