Although Liferays jboss-web.xml is set correctly, JBoss 5.1 is still picking up the older hibernate-validator.jar from the commons/lib folder. The exception coming while starting JBoss is:

java.lang.NoSuchMethodException: org.hibernate.validator.ClassValidator.<init>(... 

To solve this issue without touching the commons/lib, add following lines into portal-ext.properties

 hibernate.validator.apply_to_ddl=false
 hibernate.validator.autoregister_listeners=false