php 4.0.6 file upload security fix

I have been running a php script via a web interface that included mkdir() with a chmod to 775 and a subsequent file upload via a form to the newly created directory. It had been running fine without problems for over a year. Now, although I can mkdir(), the chmod defaults to 755 and the I receive the error message "unable to open for reading. file does not exist". I suspect it has something to do with the recently released file upload security fix that my ISP has installed. Does anyone know if this is indeed the root of the problem and can you offer a solution? thanks peter ps Server is running Free BSD, PHP 4.0.6 --