After following the conventional steps to troubleshoot the FIM Management Agent to retrieve the schema (http://social.technet.microsoft.com/wiki/contents/articles/10482.troubleshooting-fim-ma-failed-to-retrieve-schema-troubleshooter.aspx)
none of the steps were able to resolve the issue.
The miiserver.exe.config file was either corrupted, or contained bad data.
In this particular case a few environments were set up with FIM for different purposes: FIM DEV for development environment and FIM PROD for production. The troubleshooting on the FIM PROD server pointed to problems with the
miiserver.exe.config file. In this case we were able to take the config file from the working FIM DEV environment and copy it over to the FIM PROD server.