$tmp = "xx/yy";

$parts = explode("/",$tmp);

for($i=0;$i<count($parts);$i++)
{
	$directory = 'files'; //my base-dir
        //strange loop to show the error
	for($j=0;$j<=$i;$j++)
		$directory = $directory . '/' . $parts[$j];

	echo 'before :: ' . $directory . '<br>';
	@mkdir($directory,0775);
	echo 'after :: ' . $directory . '<br>';
}

outputs:
before :: files/xx
after :: files/xx
before :: files/xx/yy
after :: files/xxyy

The last line has the error.
As you can see mkdir() changes the variable.
Even if the rest of the code is buggy ( ;) )
this shouldn't happen :)

 - bram