GURU advise seeked, 'permission denied' while creating mailbox

[jokke heikkila]

I keep hitting my head to the wall with this one. I've installed
cyrus-postfix-mysql setup under debian box and everything else seems to work as
shoud except the mailbox creation. I keep getting 'permission denied' whatever I
try and now I'm out of ideas. Below are snippets of two ways I've tried to
create the mailboxes. 

--with cyradm-- 
tahko:/root$ cyradm --user cyrus localhost 
IMAP Password: 
              tahko> lm 
tahko> cm magnusborg0001/mailbox 
createmailbox: Permission denied 
tahko> quit 

--with imtest-- 
tahko:/root$ imtest -u cyrus -a cyrus localhost 
S: * OK tahko.magnusborg.fi Cyrus IMAP4 v2.1.11 server ready 
C: C01 CAPABILITY 
S: * CAPABILITY IMAP4 IMAP4rev1 ACL QUOTA LITERAL+ MAILBOX-REFERRALS NAMESPACE 
UIDPLUS ID NO_ATOMIC_RENAME UNSELECT CHILDREN MULTIAPPEND SORT 
THREAD=ORDEREDSUBJECT THREAD=REFERENCES IDLE STARTTLS 
S: C01 OK Completed 
Please enter your password: 
C: L01 LOGIN cyrus {6} 
S: + go ahead 
C: <omitted> 
S: L01 OK User logged in 
Authenticated. 
Security strength factor: 0 
. create magnusborg0001.cyrus 
. NO Permission denied 


SASL works beatifully, so does web-cyradm except for creating the mailbox. Any
ideas what could be the cause. 

Debian woody 
Postfix 2.0.16 
cyrus-imapd-2.1.11 
cyrus-sasl-2.1.10 


jokke h.