Ryuk you are right on Facebook I did say that I couldn't see wrong with the account. However, it's obviously been a problem, so I really dove into the security settings. Sure enough there was a very hidden security setting that I obviously overlooked. The setting affected all users in the "Intermediate" member group.
I had the rights for that intermediate group linked to the regular member group, making it hidden in the permissions list, causing me to miss the fact that there were missing permissions for that group. The missing permissions included the innabililty to send and receive PM's.
The issue should now be resolved and thanks for having the patience in sticking with me while I tried locating the cause of the problem.