server not reachable

I have just upgraded from beta version to latest and am now experiencing the following:
System file directory is below the Drupal root for security but set to public.
I have set-up some subdirectories from my webfm folder.
These show up fine from within Web File Manager but when I attempt to upload a file it says, "working...please wait" but just hangs there and an "! error on page" shows within the status bar.
Thereafter, if I refresh and try to navigate to the same folder again it now says "server not reachable".
All was working fine with beta version. Maybe something happended during the module update I performed?
(Only other thing I have played around with was system file path as I wasn't sure whether I really wanted it behind the root but have decided that I do.)