Ok, I followed your advice, checked and re-did permissions. Using the sudo command I verified I could read all the files.
The user account I made, also had it's own group created, so I just added 'nobody' in /etc/groups to it at the end after the group#.
I checked the GUI, no errors with the paths seemed to show up.
However when I try to access the website I just get the http 404 - error. LSWS server's log is showing the attempted access, but the virtual host is not having anything written to it's file (permissions seem fine).
Still seems like it doesn't like the direct path. :/