Starting Satellite fails with "Attempting Re-Connect to the database failed"

Issue

# rhn-satellite start
Starting spacewalk services...
Starting postgresql service: [FAILED]
Initializing jabberd processes ...
Starting router: [  OK  ]
Starting sm: [  OK  ]
Starting c2s: [  OK  ]
Starting s2s: [  OK  ]
Starting tomcat5: [  FAILED  ]
Waiting for tomcat to be ready ...
Starting httpd: [  OK  ]
Starting osa-dispatcher: Spacewalk 7078 2014/12/17 13:44:48 -04:00: ('Error caught:',)
Spacewalk 7078 2014/12/17 13:44:48 -04:00: ('Traceback (most recent call last):
  File "/usr/share/rhn/osad/jabber_lib.py", line 117, in main
    self.setup_config(config)
  File "/usr/share/rhn/osad/osa_dispatcher.py", line 112, in setup_config
    rhnSQL.initDB()
  File "/usr/lib/python2.4/site-packages/spacewalk/server/rhnSQL/__init__.py", line 102, in initDB
    __init__DB(backend, host, port, username, password, database)
  File "/usr/lib/python2.4/site-packages/spacewalk/server/rhnSQL/__init__.py", line 55, in __init__DB
    __DB.connect()
  File "/usr/lib/python2.4/site-packages/spacewalk/server/rhnSQL/driver_postgresql.py", line 174, in connect
    return self.connect(reconnect=0)
  File "/usr/lib/python2.4/site-packages/spacewalk/server/rhnSQL/driver_postgresql.py", line 163, in connect
    password=str(self.password))
SQLConnectError: (None, None, 'rhnschema', 'Attempting Re-Connect to the database failed')
[  OK  ]
Starting Monitoring ...  [ OK ]
Starting MonitoringScout ...  [ OK ]
Starting rhn-search...
Starting cobbler daemon: [  OK  ]
Starting RHN Taskomatic...
Done.