missed adding, the directories involved are on the main sda partition.  While the plan will be to use a second drive, I wanted to minimize install variables while getting this set up.

Is there a command to list which version of Transmission?

.. in trying to find version# I found the -d command, here is what Transmission thinks it should be using vs what the .json file is telling it show differences in directories I'll have to test:

transmission-daemon -d
{
    "alt-speed-down": 50, 
    "alt-speed-enabled": false, 
    "alt-speed-time-begin": 540, 
    "alt-speed-time-day": 127, 
    "alt-speed-time-enabled": false, 
    "alt-speed-time-end": 1020, 
    "alt-speed-up": 50, 
    "bind-address-ipv4": "0.0.0.0", 
    "bind-address-ipv6": "::", 
    "blocklist-enabled": false, 
    "dht-enabled": true, 
    "download-dir": "\/home\/nimda\/Downloads", 
    "encryption": 1, 
    "incomplete-dir": "\/home\/nimda\/.config\/transmission-daemon\/Incomplete", 
    "incomplete-dir-enabled": false, 
    "lazy-bitfield-enabled": true, 
    "message-level": 2, 
    "open-file-limit": 32, 
    "peer-limit-global": 240, 
    "peer-limit-per-torrent": 60, 
    "peer-port": 51413, 
    "peer-port-random-high": 65535, 
    "peer-port-random-low": 49152, 
    "peer-port-random-on-start": false, 
    "peer-socket-tos": 0, 
    "pex-enabled": true, 
    "port-forwarding-enabled": true, 
    "preallocation": 1, 
    "proxy": "", 
    "proxy-auth-enabled": false, 
    "proxy-auth-password": "", 
    "proxy-auth-username": "", 
    "proxy-enabled": false, 
    "proxy-port": 80, 
    "proxy-type": 0, 
    "ratio-limit": 2.0000, 
    "ratio-limit-enabled": false, 
    "rename-partial-files": true, 
    "rpc-authentication-required": false, 
    "rpc-bind-address": "0.0.0.0", 
    "rpc-enabled": false, 
    "rpc-password": "", 
    "rpc-port": 9091, 
    "rpc-username": "", 
    "rpc-whitelist": "127.0.0.1", 
    "rpc-whitelist-enabled": true, 
    "speed-limit-down": 100, 
    "speed-limit-down-enabled": false, 
    "speed-limit-up": 100, 
    "speed-limit-up-enabled": false, 
    "umask": 18, 
    "upload-slots-per-torrent": 14
}

While this is what it should be using (.json file):
{
    "alt-speed-down": 500,
    "alt-speed-enabled": true,
    "alt-speed-time-begin": 480,
    "alt-speed-time-day": 127,
    "alt-speed-time-enabled": true,
    "alt-speed-time-end": 0,
    "alt-speed-up": 10,
    "bind-address-ipv4": "0.0.0.0",
    "bind-address-ipv6": "::",
    "blocklist-enabled": false,
    "dht-enabled": true,
    "download-dir": "\/home\/nimda\/dl\/torrent",
    "download-limit": 1000,
    "download-limit-enabled": 0,
    "encryption": 2,
    "incomplete-dir": "\/var\/lib\/transmission-daemon\/info\/Incomplete",
    "incomplete-dir-enabled": false,
    "lazy-bitfield-enabled": true,
    "max-peers-global": 200,
    "message-level": 2,
    "open-file-limit": 32,
    "peer-limit-global": 240,
    "peer-limit-per-torrent": 60,
    "peer-port": 20657,
    "peer-port-random-high": 20500,
    "peer-port-random-low": 20599,
    "peer-port-random-on-start": true,
    "peer-socket-tos": 0,
    "pex-enabled": true,
    "port-forwarding-enabled": false,
    "preallocation": 1,
    "proxy": "",
    "proxy-auth-enabled": false,
    "proxy-auth-password": "",
    "proxy-auth-username": "",
    "proxy-enabled": false,
    "proxy-port": 80,
    "proxy-type": 0,
    "ratio-limit": 0.2500,
    "ratio-limit-enabled": true,
    "rename-partial-files": true,
    "rpc-authentication-required": true,
    "rpc-bind-address": "0.0.0.0",
    "rpc-enabled": true,
    "rpc-password": "{fbee735f7d8ea11d023b50362d70978f8e394aeaQ\/LHG6zy",
    "rpc-port": 9091,
    "rpc-username": "transmission",
    "rpc-whitelist": "127.0.0.1,10.10.*.*,192.168.*.*,*.*.*.*",
    "rpc-whitelist-enabled": true,
    "speed-limit-down": 1500,
    "speed-limit-down-enabled": true,
    "speed-limit-up": 50,
    "speed-limit-up-enabled": true,
    "umask": 2,
    "upload-slots-per-torrent": 4,
    "watch-dir": "\/home\/nimda\/dl\/torrent",
    "watch-dir-enabled": true
}

 ========================
I found the directories specified by 'transmission -d" did not exist, so I made them and chmod 766 and chgrp to debian-transmission and I still get the same 
"Error: Permission Denied (/home/nimda/dl/torrent/lubuntu-10.04.iso)"
on the transmission web gui.  Meanwhile, a second box running older puppy-linux with transmission-gui is downloading the same file successfully.