Thanks for the help. The problem is that the main blog is not in a subdirectory. If I add a new blog, the image on the blog activity page and on the entry page both work. But these main blog is not in its own subdirectory but falls in the install root.
Is there anyway to modify the theme to call for links with the full path or a modified relative path?
Thanks but both permissions and thumbnail creation works for me but avatar and group avatar uploading does not.
EDIT: Correction, I can upload avatars after clearing out the user’s avatar folder via FTP. Unfortunately, I cannot delete these new avatars from the user’s Profile page without using FTP. So it does appear to be a permissions issue, where Buddypress cannot delete existing avatars. Ideas?