usermin permissions errors

I had to change a setting in /etc/dovecot/dovecot.conf because both usermin and squirrelmail mail clients were giving me permissions errors after login for newly created users. The directories for the users were being created in /var/lib/dovecot/index with the wrong owner. Please note, I am using both the GUI and the /usr/share/webmin/virtual-server/create-user.pl program. I use the back-end programs to load all the stuff I am migrating from an old red-hat server to the new ubuntu-virtualmin server.

I changed:

mail_location = maildir:~/Maildir:INDEX=/var/lib/dovecot/index/%u:CONTROL=/var/lib/dovecot/control/%u

to

mail_location = maildir:~/Maildir

The permissions errors in both usermin and squirrelmail stopped, but now mail is not being delivered! A much bigger problem! It looks like it is being held in ~user/Maildir/dovecot.index.cache, but the file is in binary format so it is hard to be sure.

I initially did change the permissions on the /var/lib/dovecot(etc) folders that were indicated on the repair posts for the error message that was generated (a Jamie fix), but that did not fix the problem:

I did:

chmod 777 /var/lib/dovecot /var/lib/dovecot/index /var/lib/dovecot/control

I need help!!!