I've also found that if I login as Member with Read/Contribute/Admin permissions checked. When I choose an image as album cover I get the error message:

Permission Denied
You don't have permission to admin pa_album 44791912

The other permissions for this album are:

Admin has Read/Contribute/Admin permissions checked.

Members has Read/Contribute permissions checked.

As I explained earlier my intention was that each Album owner would have Read/Contribute/Admin permissions and that other Members would have Read only permissions. However I had to give Members Contribute permissions in order that the Album owner can see the add photo buttons.

Is there an error in the permissions setup?