we fixed it, thanks to my tier 3 admin. he solves all the really hard questions.
1. Applied fix outlined in Moodle issue MDL-21640
http://tracker.moodle.org/browse/MDL-21640
that means a function upgrade_backup_db in moodle/backup/lib.php was
modified.
line:
require_once ("$CFG->dirroot/backup/version.php"); // Get code
versions
was changed to:
require ("$CFG->dirroot/backup/version.php"); // Get code versions
2. Increased max_allowed_packet in /etc/my.cnf configuration file
max_allowed_packet = 64M