I was switching my file permissions for the “wp-content/uploads” folder in my ftp client, but it still didn’t work. Eventually I checked the permissions of the folders through my host’s control panel and the permissions were still wrong. After I changed them there (to 777), I could upload again.
Nevermind. I didn’t realize how man times this topic is repeated here.
To save a little time, this seems to be a good solution:
http://www.village-idiot.org/archives/2007/05/22/wp-emergency-password-recovery/
how did you fix it? I’m having the same problem.