I had to disable the Flash uploader to upload images, I've never done this before. Now when you try to drag an image into the window, after the progress bar is finished, a yellow box appears at the top and says:
Directory /home/etc. contains no pictures
Otherwise, everything seems fine so far :)
http://wordpress.org/extend/plugins/nextgen-gallery/
I have the same issue, noticed after we upgraded to 3.3.2 but not sure if it was related. The zip upload works fine as does normal one by one uploading.
All permissions are as before in the upload directory, the top level gallery directory creates fine and the other upload methods create files properly.
I wonder if Alex can use the WP upload code as that works fine on the systems so far.