Warning: imagejpeg() [function.imagejpeg]: Unable to open \'/home/SITENAME/public_html/files/cache/052f225905c1618003df0c5088aec7a9.jpg\' for writing: Permission denied
Sounds like a permissions problem to me, but we can't tell from this end.
If you can FTP (or CD) into that /home/SITENAME/public_html/files/
and see if 'files' is owned by, and has the same permissions as public_html
Then see what permissions they NEED to have for your hosting setup.
For future reference the problem was the PHP handler. It has been changed to CGI mode (as opposed to DSO) and they turned suEXEC ‘off’ - might be useful for someone down the line.