Dropbox support will walk you through how to fix this on their web site. Search for permission error "OS X" and you'll get this link:
Here is the summary of steps needed on OS X since the article is mostly about Windows errors and antivirus causes of the same error.
For our advanced users
If unlinking and relinking your account doesn't solve the issue, your settings may be protected or inaccessible due to a permissions problem. If this is the case, you can remove your settings by hand using an administrative account. Here's how:
- Quit Dropbox by clicking on the Dropbox menu from the menu bar and selecting Quit
- From Finder click on the Go menu and select Go to folder... (Shift-Command-G)
- In the resulting field, type:
This will take you directly to your settings files, which are normally invisible in the Finder.
- Move all the files in your settings folder to the trash
- Restart Dropbox.
Dropbox is located in your Applications folder. Once Dropbox loads, the application will rebuild your settings files and you will be asked to relink to your account.
Note: We're working on a way to check and fix your Dropbox installation automatically from within the application. Stay tuned...
If you are reading this and use a version of Dropbox much newer than v1.4.12, you might check Dropbox help before deleting the .dropbox folder and restarting the app, just in case they have implemented a better fix in a newer version of the software.
If this doesn't work on your Mac, you might also need to take a second step of renaming the actual Dropbox folder to ensure it can download everything from Dropbox and then use a tool like Kaleidoscope to diff the two folders and check that nothing was lost in the shuffle.