Magento : Destination folder is not writable or does not exist error.

Goto : lib/Varien/File/Uploader.php

Temprary change following code and try to upload image. Now in error message you can see folder path.
in folder path you have to give file permission 777 and it working normal. after error is resolved revert your code as it is.


if( !is_writable($destinationFolder) ) {
    var_dump($destinationFolder);  
    throw new Exception(''.$destinationFolder.'Destination folder is not writable or does not exists.');
}

Hope this help.....