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Same problem here. Did you finally find a solution? And are you still using Webcon? I am bit annoyed with the safe mode issue, not willing to reinstall a whole day long.
However, when I update the setting in the database on the next service restart it overwrites to safe mode = 1 :)

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Hi,
I found the same problem last time when I tried to install Express version using Std/Ent installation package. After normal installation Workflow service switched to Safe Mode. From my "investigation" I found that you can create only 2 databases - config and content. You have to skip creating attachment and archive databases. After making such installation workflow service starts without errors in normal mode. It doesn't work on old databases - you need to create new.
I hope it could help.