I'm saying to do it before the update. Aparently the sequence should have never existed, un less you did the update twice, but in that case you would have en error on the table creation, saying that the relacion mdl_blocks already exists.
What you can o is drop the sequence befor upgrading, so the table and sequence are created without giving you any error.
Installing and upgrading help
Errors running upgrade to 1.5.2+
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