I came up with these queries for you. You can run these queries on your database to mark all PMs as read:
(added semicolons per DSF's post):
Code:
UPDATE xf_conversation_recipient
SET last_read_date = UNIX_TIMESTAMP();
UPDATE xf_conversation_user
SET is_unread = 0;
UPDATE xf_user
SET conversations_unread = 0;
I tested this and it works. But you should backup first to be safe.