Images Wont Upload Into Post

All of a sudden I cant upload images into posts after upgrading to 2.8

Everytime I try, I get this message

“Unable to create directory /home/fhlinux172/g/geomixes.co.uk/user/htdocs/wp-content/uploads/2009/07. Is its parent directory writable by the server?”

Which is odd as it was working perfectly fine before the upgrade, I tried creating a new 07 folder manually, but still get that same message. I cant even downgrade back to 2.71 as my host wont let me, so im stuck!