If you have permission set to 777 then you have several real problems, first is that you set anything 777. That may have been a diagnostics step in 2002, but that was 15 short internet years ago.
No such file or directory sounds more like a path/working directory issue, but it’s really hard to guess with the relatively small amount info you’ve give us.
Tell us what pwd returns just before you try to “start the server”, and tell us exactly what your typing to do that.
PS in 2017 it’s really not good to use 777 permissions.