We can chalk this one up to a non-bug which I think we all assumed from the beginning as this was likely either a server issue or human error. The latter is the truth in this case. My bad.
In the attachments storage directory box I had entered "../user_files" instead of the FULL PATH which is the correct entry. The test script worked with this but it caused errors when attaching files with posts.
Why did I do it this way? Good question. When I was hosted on Network Solutions the path to the directory did not work for some reason and I resorted to the "../" method and it worked there. Earlier this year I changed to a new hosting company I kept the setting and like I mentioned, it worked in the test... but not in posts. One other oddity about this is that I also set the avatar storage directory the same way yet it worked.
Moral of the story: Just because it works doesn't mean it is correct.
And thank you Rick for the support.
