I've never run into this issue before, but I recently attempted an upgrade of my large forum on an offline basis to make sure it'd run smoothly.
The upgrade successfully completed, but all templates on my skin (which is based off a 3rd party skin) reverted to the "default" skin values.
Is there anyway to upgrade but keep template modifications?
The way the template system works means that it's not possible for the upgrade script to completely remove modifications you've made to templates. The upgrade script can't and won't undo your edits so if yours are gone, it's due to something you've done.
All I did was upload the new version of MyBB, go to /install/upgrade.php and run the upgrade process, it successfully completes, I delete /install/, go to the forum and it looks like a weird mix of the old theme with the Default MyBB theme.
have you deactivated the plugins before the upgrade AND re-activated them after the upgrade .. ?
Are you sure you're not getting mixed up with the theme, i.e. the CSS, and the templates, i.e. the HTML?? As they're very different things. It would help if we can see your forum to see what you actually mean.
Right, that's the theme's CSS, nothing to do with the templates.
Have a look in ./cache/themes/, how many folders are in here?? Is your normal theme still listed in the ACP?? What happens if you click it, then click all of the stylesheets one by one and save them??