Steve, as soon as you get this odd "No album has been made yet", please close the upload window and open jAlbum's system console (F7). Now issue the following in the upper panel (copy,paste,execute):
engine.getInterpretedOutputDirectory();
What does it print in jAlbum's lower panel when you execute it? Is not the path printed there the truly existing album folder for that current project?
You can follow up this test by executing this code:
engine.getInterpretedOutputDirectory().exists();
Now, does it print "true" or "false" to the lower panel? The root of the error message is that the uploader can't find an existing local album folder.