I was having the same problem. The error message I get is: Unable to create directory /var/www/vhosts/carolewalsh.com/httpdocs/wp-content/uploads. Is its parent directory writable by the server?
Maybe the problem has to do with the fact that I'm running on a virtual server. My wp files are in the http directory where all my other http files are. There is only one directory above the http directory. It includes:
There is no way to get above that directory to anything resembling /var/www/vhosts/carolewalsh.com
But anyway, the parent directory for wp-content is the httpdocs directory. So I tried to set the permissions to the httpdocs directory to 777 (it had been set at 700). It came up with an error, but it did it.
I was then able to add images to my media library. So I set the permissions on the httpdocs directory down to 775, and I'm still able to add images to my media library. Yea!