The uploaded file could not be moved to…

I could not find any other posts with this specific problem, so I’m hoping someone can help me.

I’m getting a site up and running and uploading a bunch of photos from different events to populate the site. After doing quite a few successfully I got the “The uploaded file could not be moved to <upload directory>” error. I tried different pictures to make sure it wasn’t a problem with the files… everything bombs. Since I had done plenty of other files without an issue I don’t think it’s the 755/777 permission problem I’ve read about elsewhere.

So I went and looked inside /wp-content/uploads/2009/03 and found that there are 1998 files in that folder. I think I’m hitting some kind of host-enforced 2000 file-per-folder ceiling. It didn’t take long to hit this since each picture you upload creates a total of four copies at different resolutions. So I tried changing my upload folder in Dashboard>Settings>Miscellaneous to a different folder, but then all the existing photos I already uploaded no longer displayed on the site.

Any ideas here? Is there a way to configure WP to use a “day” folder in addition to the month folder, or change the upload folder to something new without losing the path to the existing photos?

Or am I out of luck until April, when a new folder gets created? ??