Ah, glad you got it sorted! I saw you edited your post, but i'll reply to that anyway just for some info...
I'm afraid I don't know what you mean regarding turning on PHP error reporting. How do I do that please?
Your hosting company did it for you
The PHP permission error they repaired can be found in the error_log file I mentioned. Some webhosts don't allow access to such technical data, I suppose this was the case here.
Just out of curiosity, when you first installed Joomla! do you remember setting up an FTP account for it through the Install Wizard? Reason I ask is because this sort of thing might happen again (incorrect permissions when installing Joomla extensions) and having a system FTP account for Joomla to use internally usually prevents these things from occuring.
I highly recommend you check this, it may save you from headaches down the road. Log in to your Joomla administrator panel, and go to 'Global Configuration' > 'Server' tab > Check the FTP Settings section on the bottom-left and see if they are filled out.
If they are not, I can help out with setting that up if you need it. If they are there and it is enabled, I guess your web server just made a random mistake somewhere