[Typo3] tt_news Installation not allowed in path typo3/ext/

[Gilles Deacur]

I went to the extension manager and wanted to install tt_news and 
noticed there was an update, so decided to download the update before 
installing this.  I seem to connect fine to the repository, but get this 
when I'm done with the download:

Extension Manager
Go back
Extension copied to server
Error: Installation is not allowed in this path (typo3/ext/)



I don't know if this is related to my folder settings and permissions, 
but the folder typo3/ext/ is set to 777 and the owner/group is myself/nobody


Any ideas on what's going wrong?