File Manager missing files since upgrade

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Hi I have upgraded my clients site and since doing so have noticed that all teh images in the file manager have lost their referance. I tried using the 'rescan' method suggested elsewhere on this forum but I get the following error:

# File 16491238586244POSHHOUSEISOLACOMICINA.JPG has been rescanned
Warning: imagejpeg(): Unable to open '/hsphere/local/home/bloksoli/villacasafontana.com/files/thumbnails/level2/14671238443522RS2VILLABALBANIELLO.jpg' for writing: No such file or directory in /hsphere/local/home/bloksoli/villacasafontana.com/concrete/helpers/image.php on line 73

Am I missing something or has the upgrade screwed my clients files?

craftyCS