This is almost always due to a permissions problem. On OSX Server, WO apps run as "appserver" by default: either appserver doesn't have permissions to run the application or appserver doesn't have permissions to write the log.

Make sure that appserver is able to write to the location you specify for your logs (see this FAQ item) -- you can use a similar test to determine if appserver can execute the application. Since everyone has permissions to write to /tmp, you might try using that as a test.