Add Category is not creating new file in /data/media but is in /data/thumbnails

[timposey]

Add Category is not creating new file in /data/media but is in /data/thumbnails.  This happens when I try to add a new category, I have tried to add the file manually but when I then try to create the thumbnails with the auto thumbnailer it does not create them.  I don't have any idea where to even look to find this problem, I am running a pretty heavily modified version v1.7.3  So I might have messed something up in the mods, but it has worked flawlessly for some time. 
My website is http://www.centersoffaithhopeandlove.org

Any help would be greatly appreciated!!!   

[BartAfterDark]

did you change the rights for the folder? remember to cmod them to 777

[timposey]

As far as I can tell, all chmods are set right.  I am assuming that the files that you are talking about are the files data and media... are there some other files that I need to check?  Any suggestions are welcome.  This is the weirdest thing I have seen. It was working great and then this error.

[timposey]

I just tried something and this is even crazier.  I added a category and just as before it would not add the category file in the data/media folder, but I decided I would add a subcategory under that category that I had just created to see what would happen and then it created both the first category file and the subcategory file.  I'm still trying to figure out why!

[timposey]

ok more updates dealing with this problem. 

The program is actually creating the thumbnails, but is not changing something so that it actually knows that the thumbnail does exist in the folder.  For example when I tried to create the thumbnail, it said that there was an error in creating the file but when I went to the directory it was actually there in the correct folder.  But for some reason when I bring up the front page or the photo category it displays as if there is not a thumbnail.  So I worked around this problem by editing the image and pointing the thumbnail to the thumbnail picture that was created... saved that and then it displays correctly. 

I guess my biggest question now is where could this error be occurring.  It is obviously converting and writing the image to the directory but not registering this change in some important place... Any suggestions?