I found the problem when I tried to recompile the postgresql jdbc
driver itself to do some debugging.
I don't know when or why but I already had a postgresql jdbc in my
classpath. The culprit was found in
/Library/Java/Extensions/postgresql-8.2-506.jdbc3.jar
May be some old installer has deployed it there I don't know. Once
removed the driver in the lib directory was able to pickup the correct
har and class. I think the postgresql-8.2-506.jdbc3.jar was prior to
the other one in the classpath and was called by the driver wrapper.
This jar then used its own classloader in its directory and wasn't
able to find the correct class.
Hopefully someone will find this helpful.