Haha. That message only comes up when someone is trying to upload into a category that doesn't exist as a directory on your system, under your photo album.
It's there to stop people from uploading files into arbitrary places on your system.
I'm guessing that it's getting a "false reading" here for some reason. If you want to post/PM/e-mail me the location of your album, I can take a look for you.
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