Everyone makes mistakes, I've made some crackers in the past!!
It's hard to say without seeing the actual code but it looks like the upload button calls a separate script which likely had the wrong ownership so can't write to the pics folder since the upgrade
as someone that’s built a fair few website and the odd forum in the past I reckon your bang on the money with the issue I personally can’t think of much else that it could be certainly nothing that would take months to fix.