drwxrwxr-x 2 user1 user1 4096 Nov 27 2011 conf
-rw-r--r-- 1 lsadm lsadm 831 Nov 27 2011 vhconf.xml
As mentioned, it works fine after adding user1 to the lsadm group
Why would an upgrade touch group assigments?
I'm finding that it stops working and that by re-issuing the usermod command it starts working again.