You can change the location of the logs via the registry entry:
HKEY_LOCAL_MACHINE\SOFTWARE\Foundstone\FoundScan\General Settings\Log Files
After you change it to D:, bounce the FSLogDispatcher Service to have it reflect the change.
It sounds like maybe when you upgraded you accepted the installer defaults vs. setting the installation location back over to the D: drive? Since C: is so much smaller on the appliances it's recommended you specify D: for the install directory. You might want to move everything back over to D: at some point via a reinstall.