If the server can not read the dictionaries - all words will appear to be spelling mistakes.
Give EVERYONE access to READ the phpspellcheck/dictionaries folder and all files and sub-directories inside.
Debugging your PHPSpellCheck installation is easy.
Make sure you have the latest PHPSpellCheck package
Goto /phpspellcheck/examples
<script type="text/javascript">
var LIVESPELL_DEBUG_MODE = true;
</script>