I encountered this problem and discovered that it was the FTP credentials being used for the storage server.
Go to the Storage Management section. list all storage nodes and select the one the one that is being used (in my case it was the ‘default member’).
Check the username and password there and make sure there is a corresponding user account on the fog server with the right access priviliges on the images folder shown in fog managment.
In my case it was set to username ‘fog’ with a very long password. I don’t know how this ended up as ‘fog’ instead of ‘fogstorage’ but it appeared to have been configured with some randomly generated password.
BTW I knew it was an access problem because the fog server’s ‘auth.log’ file showed the authentication error.