saving cropped image " failed to open stream: Permission denied"

I've got a problem with my PHP. I'm trying to edit an avatar image, by cropping and/or rotating it. The source image can be uploaded via input type=file or you can choose an image already in the server. When I try to edit an image uploaded the code works great and my image are cropped and rotated, but when I try to edit an image picked from the server I get a Warning: imagepng(img/avatar): failed to open stream: Permission denied error, all my files are on 777.

Here is my code:

 <?php
  private function crop($src, $dst, $data) {
  if (!empty($src) && !empty($dst) && !empty($data)) {
    switch ($this -> type) {
      case IMAGETYPE_GIF:
        $src_img = imagecreatefromgif($src);
        break;

      case IMAGETYPE_JPEG:
        $src_img = imagecreatefromjpeg($src);
        break;

      case IMAGETYPE_PNG:
        $src_img = imagecreatefrompng($src);
        break;
    }

    if (!$src_img) {
      $this -> msg = "Failed to read the image file";
      return;
    }

    $size = getimagesize($src);
    $size_w = $size[0]; // natural width
    $size_h = $size[1]; // natural height

    $src_img_w = $size_w;
    $src_img_h = $size_h;

    $degrees = $data -> rotate;

    // Rotate the source image
    if (is_numeric($degrees) && $degrees != 0) {
      // PHP's degrees is opposite to CSS's degrees
      $new_img = imagerotate( $src_img, -$degrees, imagecolorallocatealpha($src_img, 0, 0, 0, 127) );

      imagedestroy($src_img);
      $src_img = $new_img;

      $deg = abs($degrees) % 180;
      $arc = ($deg > 90 ? (180 - $deg) : $deg) * M_PI / 180;

      $src_img_w = $size_w * cos($arc) + $size_h * sin($arc);
      $src_img_h = $size_w * sin($arc) + $size_h * cos($arc);

      // Fix rotated image miss 1px issue when degrees < 0
      $src_img_w -= 1;
      $src_img_h -= 1;
    }

    $tmp_img_w = $data -> width;
    $tmp_img_h = $data -> height;
    $dst_img_w = $data -> width;
    $dst_img_h = $data -> height;

    $src_x = $data -> x;
    $src_y = $data -> y;

    if ($src_x <= -$tmp_img_w || $src_x > $src_img_w) {
      $src_x = $src_w = $dst_x = $dst_w = 0;
    } else if ($src_x <= 0) {
      $dst_x = -$src_x;
      $src_x = 0;
      $src_w = $dst_w = min($src_img_w, $tmp_img_w + $src_x);
    } else if ($src_x <= $src_img_w) {
      $dst_x = 0;
      $src_w = $dst_w = min($tmp_img_w, $src_img_w - $src_x);
    }

    if ($src_w <= 0 || $src_y <= -$tmp_img_h || $src_y > $src_img_h) {
      $src_y = $src_h = $dst_y = $dst_h = 0;
    } else if ($src_y <= 0) {
      $dst_y = -$src_y;
      $src_y = 0;
      $src_h = $dst_h = min($src_img_h, $tmp_img_h + $src_y);
    } else if ($src_y <= $src_img_h) {
      $dst_y = 0;
      $src_h = $dst_h = min($tmp_img_h, $src_img_h - $src_y);
    }

    // Scale to destination position and size
    $ratio = $tmp_img_w / $dst_img_w;
    $dst_x /= $ratio;
    $dst_y /= $ratio;
    $dst_w /= $ratio;
    $dst_h /= $ratio;

    $dst_img = imagecreatetruecolor($dst_img_w, $dst_img_h);

    // Add transparent background to destination image
    imagefill($dst_img, 0, 0, imagecolorallocatealpha($dst_img, 0, 0, 0, 127));
    imagesavealpha($dst_img, true);
    chmod("img/avatar", 0777);
    chmod("/", 0777);
    $result = imagecopyresampled($dst_img, $src_img, $dst_x, $dst_y, $src_x, $src_y, $dst_w, $dst_h, $src_w, $src_h);

    if ($result) {
      if (!imagepng($dst_img, $dst)) {
        $this -> msg = "Failed to save the cropped image file";
      }
    } else {
      $this -> msg = "Failed to crop the image file";
    }

    imagedestroy($src_img);
    imagedestroy($dst_img);
  }else{
      echo "Could not edit the image";
  }
}
?>

I'm working on a local server for now (wamp).