Well....still stumped.
If I completely remove the ibay, create a new one with a different name and try to install joomla into it, same issue. But if I create a new ibay, create an images directory, and render a simple page calling an image in the images directory, it works.
It seems that this machine was compromised, but I could be wrong. The history | more did not reveal anything I was not working on. The error log revealed some apache configurations, multiples in a couple of hours. This is why I think it has been compromised.
[Tue Jan 13 18:39:27 2009] [notice] caught SIGTERM, shutting down
[Tue Jan 13 18:41:41 2009] [notice] Digest: generating secret for digest authentication ...
[Tue Jan 13 18:41:41 2009] [notice] Digest: done
[Tue Jan 13 18:41:42 2009] [notice] Apache configured -- resuming normal operations
[Tue Jan 13 18:49:50 2009] [error] [client 192.168.5.54] client denied by server configuration: /home/e-smith/files/ibays/nwea/html
[client 222.187.221.201] script '/home/e-smith/files/ibays/website/html/prx1.php' not found or unable to stat
[client 74.55.128.226] script '/home/e-smith/files/ibays/website/html/errors.php' not found or unable to stat
[Tue Jan 13 19:54:52 2009] [error] [client 87.106.102.198] File does not exist: /home/e-smith/files/ibays/website/html/12all
[client 213.229.60.50] script '/home/e-smith/files/ibays/website/html/errors.php' not found or unable to stat
[client 74.55.128.226] script '/home/e-smith/files/ibays/website/html/errors.php' not found or unable to stat
[client 213.229.60.50] script '/home/e-smith/files/ibays/website/html/errors.php' not found or unable to stat
[Tue Jan 13 20:29:56 2009] [error] [client 192.168.5.75] File does not exist: /home/e-smith/files/ibays/website/html/favicon.ico
[Tue Jan 13 20:30:49 2009] [notice] Graceful restart requested, doing restart
[Tue Jan 13 20:30:50 2009] [notice] Digest: generating secret for digest authentication ...
[Tue Jan 13 20:30:50 2009] [notice] Digest: done
[Tue Jan 13 20:30:50 2009] [notice] Apache configured -- resuming normal operations
[Tue Jan 13 20:32:14 2009] [error] [client 89.218.85.18] File does not exist: /home/e-smith/files/ibays/website/html/poll
[Tue Jan 13 20:38:57 2009] [error] [client 24.213.90.168] File does not exist: /home/e-smith/files/ibays/website/html/nonexistenshit
[Tue Jan 13 20:38:57 2009] [error] [client 24.213.90.168] File does not exist: /home/e-smith/files/ibays/website/html/mail
[Tue Jan 13 20:38:57 2009] [error] [client 24.213.90.168] File does not exist: /home/e-smith/files/ibays/website/html/bin
[Tue Jan 13 20:38:57 2009] [error] [client 24.213.90.168] File does not exist: /home/e-smith/files/ibays/website/html/rc
[Tue Jan 13 20:38:57 2009] [error] [client 24.213.90.168] File does not exist: /home/e-smith/files/ibays/website/html/roundcube
[Tue Jan 13 20:43:26 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:43:26 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:43:26 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:43:26 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:45:38 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=99&Itemid=85
[Tue Jan 13 20:45:38 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=99&Itemid=85
[Tue Jan 13 20:45:38 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=99&Itemid=85
[Tue Jan 13 20:45:38 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=99&Itemid=85
[Tue Jan 13 20:46:43 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:46:43 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:46:43 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:46:43 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_contact&task=view&contact_
[Tue Jan 13 20:46:54 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=section&id=10&Itemid=51
[Tue Jan 13 20:47:20 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=section&id=9&Itemid=44
[Tue Jan 13 20:47:30 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=25&Itemid=58
[Tue Jan 13 20:47:30 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=25&Itemid=58
[Tue Jan 13 20:47:31 2009] [error] [client 72.93.32.176] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=25&Itemid=58
[Tue Jan 13 21:07:46 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=category§ionid=10&id=46&Itemid=84
[Tue Jan 13 21:07:58 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=section&id=10&Itemid=51
[Tue Jan 13 21:08:02 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=category§ionid=10&id=31&Itemid=51
[Tue Jan 13 21:08:10 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=240&Itemid=51
[Tue Jan 13 21:08:10 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=240&Itemid=51
[Tue Jan 13 21:08:10 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=240&Itemid=51
[Tue Jan 13 21:08:10 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/M_images, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=240&Itemid=51
[Tue Jan 13 21:08:15 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/stories, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=240&Itemid=51
[Tue Jan 13 21:08:27 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/stories, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=240&Itemid=51
[Tue Jan 13 21:08:38 2009] [error] [client 192.168.5.178] client denied by server configuration: /home/e-smith/files/ibays/images/html/stories, referer: http://www.shomewhere.com/index.php?option=com_content&task=view&id=240&Itemid=51
[client 74.55.128.226] script '/home/e-smith/files/ibays/website/html/errors.php' not found or unable to stat
[Tue Jan 13 21:35:08 2009] [error] [client 192.168.5.75] client denied by server configuration: /home/e-smith/files/ibays/images/html
[Tue Jan 13 21:35:50 2009] [notice] Graceful restart requested, doing restart
[Tue Jan 13 21:35:50 2009] [notice] Digest: generating secret for digest authentication ...
[Tue Jan 13 21:35:50 2009] [notice] Digest: done
[Tue Jan 13 21:35:50 2009] [notice] Apache configured -- resuming normal operations
Hope this sheds some light on the issue.
Grattman