Thanks for the quick reply Chuck.
I've tried many more times and double-checked my configs, heck, even chmodded every file in my photopost directory recursively with 777 and no go. I even took down my old live copy and ran the upgrade from the original path (/photos), and no go. Step 3 in the 4.8x upgrade was screwing me over by prepending the userID on every image filename in the DB, while step 2 was not renaming them to facilitate step 3.
However, I have gotten it to work now, and the way I did it was by skipping Step 3 in the 4.8x upgrade. Every other step before and after it I did. Now my photopost looks to be up and running 100%.
Please tell me if there are any negative consequences to skipping this step. In my eyes there don't seem to be any. Ive uploaded some test images to make sure my PP is working and it looks fine. You can take a look at my live PP running now @ http://www.toyotanation.com/photos/