Originally Posted by Chuck S
You need to ask your host if Imagemagick is installed correctly on the server as it appears that it is not setup right. error code 1 is a permissions error meaning you can not use it. We have information on how you can install it if you have ssh access here otherwise you need to use gd2 http://www.photopost.com/howtoinstall-php.html
I'm waiting to see what they say, I told them what you said and pointed them to this thread in the support ticket and I hope they can get it fixed as its been almost 2 weeks and no progress has been made at all.
If you have any more info that could help me it would be much appreciated. Thanks...