Hi Stu,
What you can try and this is simple to do...
If you can download a copy of your moodle/config.php and see if this line appears on it somewhere...if not then add it using Notepad.
$CFG->directorypermissions = 0777;
Then load the config.php back to you server.
This should then set the permissions for you.
Next do as Daniel says and got to Site Administration > Development > Purge all caches
And with luck, you might be OK...and no need to upgrade.
Mary