As usual, start by checking the error log of cPanel at
2009-05-23 15:44:24 info [whostmgr2]  Waiting for lock on /var/cpanel/package-limits.yaml held by /usr/local/cpanel/whostmgr/bin/whostmgr2 – locking /var/cpanel/package-limits.yaml with pid 25968
2009-05-23 15:44:25 info [whostmgr2]  Removing expired lock file /var/cpanel/package-limits.yaml.lock
(internal warning while parsing [stdin]) Sat May 23 23:41:28 2009  warn: Attempt to free unreferenced scalar.
While the error (internal warning while parsing [stdin]) Sat May 23 23:41:28 2009  warn: Attempt to free unreferenced scalar floods the error log
Permissions were all right, but suddenly this started happening, but only x86_64 architectures only. Reason being the cPanel is killing the process, since it exceeded the memory usage allowed by cPanel.
Solution would be to increase the memory limit of cPanel by following the instructions below.
WHM -> Server Configuration -> Tweak Settings Choose the setting for:
The maximum memory a cPanel process can use before it is killed off (in megabytes). Values less than 128 megabytes can not be specified. A value of “0″ will disable the memory limits.
The settings had 256M there, and increasing the value to 1024 M helped. Server had 8G RAM, so the value of 1024M was fine here.
[...] Adding packages from WHM or editing the reseller privileges is not working on a x86_64 architecture [...]