Access Denied when downloading a file

Well those ~ are really strange there in your url? You should check your pathauto/path/url alias settings if they point to the right thing.

For debugging this problem you can do the following:
The function webfm_file_download takes care of the permission issues.
So you can check which filepath actually gets checked for by webfm. I modified the function for you:

function webfm_file_download($filepath) {
  if (!_webfm_managed_by_webfm($filepath)) {
    //file is not within webfm tree
    return NULL;
  }
   dpm($filepath, 'File is managed by webfm, this is the requested filepath:'); //TODO FOR DEBUG ONLY DO NOT USE IN PRODUCTION
  $file = webfm_get_file_record(NULL, $filepath);
	dpm($file, 'This data is stored by webfm about this file'); //TODO FOR DEBUG ONLY DO NOT USE IN PRODUCTION
  if (_webfm_check_access(NULL, $file)) {
    $filename = _webfm_basename($filepath);
    //filenames in IE containing dots will screw up the
    //filename unless we add this
    if (strpos($_SERVER['HTTP_USER_AGENT'], "MSIE")) {
      $filename = rawurlencode($filename);
    }
	dpm($filename, 'We will provide this file name for download'); //TODO FOR DEBUG ONLY DO NOT USE IN PRODUCTION
    //count download
    //TODO
    // Counting downloads should be an options.
    // If optoin is introduced also change $f = webfm_get_file_record(NULL, $filepath);
    if (!empty($file->fid)) {
      $cnt = array();
      $cnt['dl_cnt'] = (int)$file->dl_cnt + 1;
      webfm_dbupdate_file($file->fid, '', $cnt);
    }

    //prepare headers
    $header = array();
    if (_webfm_force_download()) {
      $header[] = 'Pragma: no-cache';
      $header[] = 'Cache-Control: no-cache, must-revalidate';
      $header[] = 'Content-Disposition: attachment; filename="'. $filename .'";' ;
    }
    else {
      $header[] = 'Pragma: public'; // required
      $header[] = 'Expires: 0';
      $header[] = 'Cache-Control: must-revalidate, post-check=0, pre-check=0';
      $header[] = 'Content-Transfer-Encoding: binary';
      $header[] = 'Content-Disposition: inline; filename="'. $filename .'";' ;
    }

    $header[] = 'Content-Type: '. file_get_mimetype($filename);
    $header[] = 'Content-Length: '. (string)(@filesize($filepath));
    $header[] = 'Connection: close';
    return $header;
  }
  else {
    dpm('access was denied by webfm');//TODO FOR DEBUG ONLY DO NOT USE IN PRODUCTION
    //access denied
    return -1;
  }
}

If the file access is denied by webfm actually, we will have to go into what goes wrong in _webfm_check_access()

Thank you.