I am having same problem... cannot install extensions.
* JFolder::create: Could not create directory
* Warning: Failed to move file!
I also had a similar problem.
And
the reason was that the installation has registered is not correct path.
So what did i do — is:
1 go to the directory where I installed Joomla.
2 find configuration.php file
3 change access level for this file to 755: it is necessary for the changes to remain
4 open it and Change next lines to:
var $log_path = './logs';
var $tmp_path = './tmp';
5 than save it.
and it worked