Most likely, contrary to what most people say, this is not a server permissions issue. Log in to your admin panel, and go to Settings / Media. Set the media to default: wp-content/uploads Reference: http://rooturaj.com/technology/unable-to-create-directory-wordpress/

1. First, check the current values: SELECT * FROM wp_options WHERE option_name = “siteurl”;  SELECT * FROM wp_options WHERE option_name = “home”; 2. Then modify the values: UPDATE wp_options SET option_value=”http://[new domain name or ip address, without trailing slash]” WHERE option_name = “siteurl”; UPDATE wp_options SET option_value=”http://[new domain name or ip address, without trailing slash]” WHERE option_name […]