Adding image to page results in permissions error, etc. when publishing in CS4

Question

I manage dozens of sites on the same server, all managed with Contribute CS4. One such site had to be rebuilt. But now, when I add an image to a page from my computer and try to publish, it gives the following error:
Access denied. The file may not exist or there may be a permission problem.
Then, once the page returns to editing mode (since I didn't successfully Publish), the image I tried to add shows up in the Drafts Console (top left) as a separate document. When I click on it in the Drafts Console, it says:
Editing Draft in Another Application.
Strangely enough, the images are being successfully saved to the server, to an /images folder that has permission set to 777.
Still, though, Contribute won't let me add images, even directly from the server ("from website").
Does anyone have any idea what's happening? I've rebuilt the site several time, even using the original files (which worked well for years).
Thanks,
Greg

Answer 1

Note that when the images appear in the Drafts Console, and I click on them in order to delete them, Contribute asks me:
Are you sure you want to permanently delete your new page?
Why would it be calling an image a "page?"
And further, it says:
You are currently editing this page in .
I'm assuming that space before the period is where it would normally list the application used for editing. Something's definitely off here.
And it's not just my version of Contribute. Another editor (on another computer on another network) is also experiencing the same errors.