Sigh, I have the same problem as well.
I can create new sub folder, but not a new folder under root.
I cannot upload a file to my root directory as well.
I checked my permissions to the image folder and its 755
I sorted folder by size and the biggest is 332kb in the image root folder... do I need to check each subfolder for an extra large file (read in another post that might be the issue, too large of a file)
In config.php I have define('HTTP_IMAGE', '
http://ardragifts.com/image/') and define('HTTPS_IMAGE', '
https://ardragifts.com/image/');
Then define('DIR_IMAGE', '/home/ardragifts/public_html/image/');
Soooo I tried adding public_html to the http define lines.... my images error out on my website
And I tried to remove public_html and i get alot of errors only on my site
So checked my config.php under the admin folder and its set define('DIR_IMAGE', '/home/ardragifts/public_html/image/');
Any ideas on what to check or change?
Please help

Seems this is a pretty common issue, did they do an update for opencart to deal with it.. or is it just user error?
I dont play in the config files

Thanks
Nancy