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Warning: imagejpeg() permission denied

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Hi,
I am getting this message on the page where an image should be:
Warning: imagejpeg() [function.imagejpeg]: Unable to open '/home/theright/public_html/files/cache/f7e1470b42ffbdbcfbd3b7111f84b836.jpg' for writing: Permission denied in /home/theright/public_html/concrete/helpers/image.php on line 114
chef.gif

Here's the story:
My client had someone else develop a C5 site for her - they developed it on their own server. They uploaded the site last night to the client's hosting but when I visited it this morning it said Unable to connect to database.
I finally managed to sort and get it up and running after searching the forum and modifying the site.php.

I applied the new theme but could see that the developer hadn't included a database backup for me to restore the content.
Luckily I had access to the developer's site so I logged in and did a backup of the content from there which I downloaded and then I made a new dir. called backups in the root/files dir. (CHMOD is 755) and put the sql file there.
I did a restore from the dashboard and all seemed fine except for a few inline images contained in content blocks on some of the pages - I was getting the error above.
For most of them I just re-imported the images into the content blocks and all was fine, but some are still showing the error.
This is my site.php (incase it helps):
<?php 
define('DB_SERVER', 'localhost');
define('DB_USERNAME', 'theright_c51');
define('DB_PASSWORD', 'NtfTkAExgq');
define('DB_DATABASE', 'theright_c51');
define('PASSWORD_SALT', 'bk7WKp5cxKnSpBvxO63XgsIiQoFwvVQmCXM0A3DDEtpBwPHrRePIrTuHrLZcV2fh');

There is no domain pointing to this site yet - repoint hasn't yet been done.

Any help greatly appreciated. I am just worried that this is a symptom of some larger problem, as my PHP and database knowledge is minimal.
Thanks
Allison
mexicanred