Dear Chuck. Thank you for the reply.
I double checked and made sure permission for both the folder and the actual custompal.tmpl files were set to 666. (even tried 777).
Since admin panel didnt work, I also edited actual custompal.tmpl files through ftp and edited the text of PAL TITLE and STUFF. I reloaded the files to double check the changes were saved on each file.
However, the custompal displayed on my website remained in its default look unchanged. Could there be any other reason I cant edit custompal.tmpl?