How to convert control characters in MySQL from latin1 to UTF-8?
I'm not certain.  I tried to start out be reproducing your problem but the alter worked fine for me.  

test &gt; CREATE TABLE `bar` (  `content` text ) ENGINE=MyISAM DEFAULT CHARSET=latin1;  INSERT INTO bar VALUES (0x8081828384858687898A8B8C8D8E8F909192939495969798999A9B9C9D9E9F);
Query OK, 0 rows affected (0.02 sec)

Query OK, 1 row affected (0.00 sec)

test &gt; ALTER TABLE bar CHANGE content content TEXT CHARACTER SET UTF8;
Query OK, 1 row affected (0.04 sec)
Records: 1  Duplicates: 0  Warnings: 0

test &gt; select * from bar;
+---------------------------------+
| content                         |
+---------------------------------+
| ����������������������������� |
+---------------------------------+
1 row in set (0.00 sec)

test &gt; set names utf8;
Query OK, 0 rows affected (0.00 sec)

test &gt; select * from bar;
+---------------------------------------------------------------------------------+
| content                                                                         |
+---------------------------------------------------------------------------------+
| €‚ƒ„…†‡‰Š‹ŒŽ‘’“”•–—˜™š›œžŸ |
+---------------------------------------------------------------------------------+
1 row in set (0.00 sec)


Here's my related char settings

test &gt; show variables like '%char%';
+--------------------------+----------------------------+
| Variable_name            | Value                      |
+--------------------------+----------------------------+
| character_set_client     | utf8                       |
| character_set_connection | utf8                       |
| character_set_database   | latin1                     |
| character_set_filesystem | binary                     |
| character_set_results    | utf8                       |
| character_set_server     | latin1                     |
| character_set_system     | utf8                       |
| character_sets_dir       | /usr/share/mysql/charsets/ |
+--------------------------+----------------------------+


Edit

My char settings before running set names utf8

test &gt; show variables like '%char%';
+--------------------------+----------------------------+
| Variable_name            | Value                      |
+--------------------------+----------------------------+
| character_set_client     | latin1                     |
| character_set_connection | latin1                     |
| character_set_database   | latin1                     |
| character_set_filesystem | binary                     |
| character_set_results    | latin1                     |
| character_set_server     | latin1                     |
| character_set_system     | utf8                       |
| character_sets_dir       | /usr/share/mysql/charsets/ |
+--------------------------+----------------------------+
8 rows in set (0.00 sec)


Version

test &gt; select version();
+-------------------------+
| version()               |
+-------------------------+
| 5.1.41-3ubuntu12.10-log |
+-------------------------+
1 row in set (0.00 sec)