I've upgraded from Kubuntu 12.10 (clean install) to 13.04 and most of KDE is broken. kmix package is installed, however the applet (or plasmoid) for controlling sound is gone.

Any idea how to fix it?

1) could it be under hidden icons, in the tray?

2) run kmix from Konsole and see if there's errors, ignore the "X ERROR" messages, I get a ton of them

what do you mean "most of KDE is broken"? are you using your existing ~/home ? try creating a new user, does KDE work ok for it?

1) no, it's no under hidden icons
2) when I run kmix from console it works fine, I get just these messages:

QDBusConnection: session D-Bus connection created before QCoreApplication. Application may misbehave.
QDBusConnection: session D-Bus connection created before QCoreApplication. Application may misbehave.

in kmix Settings both "Dock in system tray" and "Enable system tray volume control" are checked

I've tried to install plasma-widget-veromix and it seems to work, it also appears under hidden icons.

I've already moved .kde folder, otherwise I woudn't be able to login.

force a reinstall of kmix, if you don't know how (I don't, as I use diff distro) un-install and then re-install it

I've already tried that, it doesn't help.
Not sure if it's relevant, from xsession-error log:

kmix(2495) sink_input_cb: Ignoring sink-input due to it being designated as an event and thus handled by the Event slider

Other errors I get seems to be connected to KDED daemon, if kmix relies on that service, it might cause this problem.

The issue seems to be connected to KDED service. I've tried:

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   mv ~/.kde ~/.kde-tmp
   rm -rf /var/tmp/kdecache-{username}
   rm ~/.ICEauthority
   sudo cp /home/new_account/.Xauthority /home/user/.Xauthority
   chown user .Xauthority

However most of KDE is still not working:

- logout / restart doesn't work
- kmix does not show in tray
- keyboard layout switching doesn't work
- krusader start takes 2-3min
- plasma crashes
- konsole is not responding
- Service Manager can't display list of services

Creating new user account solved the issue. I have no idea which configuration file might cause this, I thought most of them are in ~/.kde folder

Service Manager can't display list of services

This, among many others indicates that the various parts of KDE are not able to communicate with each other.

Other than ~/.kde these files and folders also play a role:

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~/.Xauthority
~/.dbus/
~/.local/
~/.config/

If you still want to recover your existing user, I would suggest trying those first, in that order.
Please make sure you fully logout and that all processes belonging to your session have been killed before performing the removal and attempting to login again.