I have it working on many machines, including some I have upgraded from 8.5.1.
First what is your server OS?
I want to understand the sequence exactly and what you are seeing.
You have an 8.5.1 server configured with the redirector and then you upgrade the server to 8.5.2 and when you go to your server in the browser and it no longer will redirect you and you get a server console error.
So I am assuming the new iwaredir.ntf that came with 8.5.2, upgraded your design of redirect.nsf and has now caused this problem.
Does that all sound correct?
One thing you could do to determine if it is the design change in the new 8.5.2 iwaredir.ntf, replace it with the 8.5.1 iwaredir.ntf and replace design on your redirect.nsf with that one and start up your 8.5.2 server and see if the redirector is working.