Following Mark's suggestion on file permissions I managed to get EasyDiscuss 4 working for the most part.

But we seem to have a small bug someplace. I have the avatars in EasyBlog set to pull from EasyDiscuss however they are not displaying in EasyBlog like they did before upgrade.
Out of curiosity I took a look at the dev server that has RC EasyDiscuss on it and it has the same issue. So it isn't server specific.
Can you please look into this?