Ok - interesting!

Can you send me the paster.log from a daemon session where you try an upload?

Steps for that are:

1. from the directory of your galaxy installation: sh run.sh --daemon (you should see 'Entering daemon mode')

2. Wait a minute, then load localhost:8080 in your browser, login, and try an upload

3. When that fails, you can shut down: (from the galaxy installation again) sh run.sh --stop-daemon

The file 'paster.log' should be in that same directory. 

Let me know if there are any problems, 

C