How do I convert from Case-Insensitive to case-sensitive in 10.8

I've run in to this before and the only solution I'm aware of is to reformat your file system. Here's what I suggest you do:

1. Boot off of your OSX install media and use Disk Utility to clone your OS image on to another drive.

2. Reformat your main drive with the file system you want

3. Restore the contents of your backed-up system to the main drive.

You could also go largely through Time Machine for this, but I'd recommend going straight at Disk Utility. TimeMachine refuses to restore from backups that have a different case-sensitivity setting.

Here's a random link to someone's article on cloning a drive with Disk Utility.