I think I figure out the problem but I'm not sure *why* it's a problem.
I copied the directory which was giving me problems from an external hard drive directly connected to the Mac to the internal Mac hard drive. I did the add again and - voila - it worked fine.
I am the administrator and have full access to all drives. Also, I can add individual files just fine to Calire, but for some reason the sub folder add doesn't work unless I move the directory.
And even more confusing, I have done sub folder adds from this external drive in the past!
All makes little sense to me but maybe someone has an idea!
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