hi monniblog..
we encountered the same problem..
The problem is not in the wordpress code..
Its in the server, your hosting site. One hosting site that i know that this problem would occur is the Media Temple.
What you should do is to manually create the directory.
/home/username/public_html/blogtitle/wp-content/uploads/2008/02.
first is remove or rename the 2008 directory then set the CHMOD to 777.
Then create the 01-12 directories then set the CHMOD to 777.
This problem would actually occur because of the security of the hosting site. WordPress create directories in ur uploads folder but the CHMOD cannot be change even if you will manually change the permission. When you will view the uploads directory on your ftp, u can see the directory created but the thing is its just like a ghost. ITS NOT REALLY THERE!!!…