Unable to Upgrade to WordPress 3.2.1

I am using Structure Theme Premium from Organic Themes for my Music Website.
http://cornflowermusic.com

For some reason I cannot install the new WordPress.
I know that when I first launched my site I had problems when I moved the site from the development directory /www to the root directory. I thought I had fixed the issues… but now when trying to update to the new WordPress install this happens:

Here is what it says when it fails:

Downloading update from http://wordpress.org/wordpress-3.2.1.zip…
Unpacking the update…
Verifying the unpacked files…
Installing the latest version…
Warning: copy(D:/Hosting/2098130/html/index.php) [function.copy]: failed to open stream: Permission denied in D:\Hosting\2098130\html\wp-admin\includes\class-wp-filesystem-direct.php on line 200

Warning: copy(D:/Hosting/2098130/html/index.php) [function.copy]: failed to open stream: Permission denied in D:\Hosting\2098130\html\wp-admin\includes\class-wp-filesystem-direct.php on line 200
Could not copy file.: D:/Hosting/2098130/html/index.php

Installation Failed

Any thoughts would be appreciated.
Thank you for your responses.

Deep Gratitude!
~ Cornflower