Looking at the /install/actions/action_mode.php file it seems that the installer checks for the following. If all is present and correct an upgrade is permitted.
The presence of the /includes/config.inc.php file
A valid connection to an existing database.
If either of these are not found then only a 'new install' is presented.
Assuming your config.inc.php file is being found this would suggest that the information in it is not correct and that a valid connection to the database cannot be achieved with it. This is unlikely as it is working for your previous installation.
I notice that the database in older config files is described as
$database_type = 'mysql';
and on one of my old sites the database_type is listed as
$database_server = 'localhost:the-path-to-my-hosts-mysql';
In config files for the same site running version 1.2 I have the following settings.
$database_type = 'mysqli';
$database_server = 'localhost';
So in your config.inc.php file you could try changing
mysql to
mysqli and if that does not work perhaps also remove the
:3306.
