Your pinpoint on 777 got me....argh! I did overlook folder 4 as it was set to 755. Changed it to 777 and looks like I'm back in business. Appears this was only happening to me with the uploads not going through. I have no idea how that folder changed permissions.....
Also, going through the subfolders under uploads...I do see some files in the folders. Not many and certainly not all of the folders. Should I go ahead and delete any files within these folders? It would seem to me that any files inside of any subfolders under uploads may cause some issues for those members wanting to upload future photos....?