Image not found error

Hope this helps:

0. Go to admin/logs/status, is everything ok there? Yes
- Are file permissions configured properly? Is PHP save mode on?

Status Report

Configuration file • Protected
Cron maintenance tasks • Last run 16 sec ago
Database schema • Up to date
Drupal core update status • Up to date
File system • Writable (public download method)
GD library • bundled (2.0.28 compatible)
Module update status • Up to date
MySQL database • 5.0.20a
PHP • 4.4.7
Unicode library • PHP Mbstring Extension
Web server • Apache/2.0.55 (Red Hat)

1. Write down the error message, I did not see any file not found error message cited above

# Image file http://www.example.com/site/files/images/logo/watermark.png not found.
# Error adding watermark.

2. Go to admin/settings/file-system
- What is your File system path? files
- What is your temporary path? /tmp

3. Go to admin/settings/image
- What is the Default image path? images

4. Go to
- What is the path for Watermark overlay image?
http://www.example.com/site/files/images/logo/watermark.png

Thanks.