mregan,
I resolved the problem by adding a new entry in web.config file.
<add key="CuteEditorTempPath" value="~/CuteEditorTemp" />
By default, CuteEditor needs read/write permission to the system temp folder. If your host doesn't allow such access, you can specify a different path by adding an entry to your Web.config file. <add key='CuteEditorTempPath' value='/mydirectory' />
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