As described here:
http://community.elgg.org/pg/plugins/costelloc/read/15366/wall-to-wall-messageboard-addon
This problem is not caused by a bug in the messageboard plugin but a server misconfiguration.
In particular, you are probably running Elgg using CGI mode which is not supported. See the technical requirements here:
Dave, there is a patch for setting group discussions to the default sitewide access level. See http://trac.elgg.org/elgg/ticket/744 - groups_discussion_access.diff
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