I believe that I have found a bug and a possible workaround for others in the same situation. I has happened on 2 different servers.
I had a version 1.0.1p3 before the update.
My image storage was moved to D:\clonedeploy\ and worked fine.
Edit: Running on Windows Server 2012R2.
Followed instructions to the letter and update to 1.1 was successful.
When I tried to pxeboot to On Demand deployment, all of my images were gone.
However, in the web interface they were all still there and seemingly nothing had changed. I tried creating a new image in the web interface and found out that on the image search overview, the old images had nothing below Imaging Environment while the newly created one said linux.
I tried to update the images with new names, but it didn't help. The drop-down menu for Client Imaging Environment was not responsive.
The workaround for this is to create new images and then copy the files and folders from the old images into the folders of the new ones. It will then work and you can boot from them again.