Converted xxx-eps-converted-to.pdf not found

I'm using TeXStudio on Mac OS X 10.7.4. The problem is that the EPS to PDF conversion is somehow broken:

\usepackage[pdftex] \graphicspath> \DeclareGraphicsExtensions . \begin[!t] \centering \includegraphics[width=3.5in] \caption \label \end . 

I've got an EPS file in: img/TCP_VC_TD_AVE_CONNS_ACT.eps Log:

Package epstopdf Info: Source file: (epstopdf) date: 2012-10-12 16:44:32 (epstopdf) size: 210073 bytes (epstopdf) Output file: (epstopdf) Command: (epstopdf) \includegraphics on input line 94. runsystem(epstopdf --outfile=img/TCP_VC_TD_AVE_CONNS_ACT-eps-converted-to.pdf i mg/TCP_VC_TD_AVE_CONNS_ACT.eps). executed. Package epstopdf Info: Result file: . ! Package pdftex.def Error: File `img/TCP_VC_TD_AVE_CONNS_ACT-eps-converted-to. pdf' not found. 

The required img/TCP_VC_TD_AVE_CONNS_ACT-eps-converted-to.pdf file is never created. TeXStudio compiles with (I've added -shell-escape , from other posts):

/usr/texbin/pdflatex -synctex=1 -interaction=nonstopmode -shell-escape %.tex 

Can anybody assist? EDIT - A minimal file breaks as well:

\documentclass \usepackage \begin \includegraphics \end
Package epstopdf Info: Source file: (epstopdf) date: 2012-10-12 16:44:32 (epstopdf) size: 210073 bytes (epstopdf) Output file: (epstopdf) Command: (epstopdf) \includegraphics on input line 4. runsystem(epstopdf --outfile=img/TCP_VC_TD_AVE_CONNS_ACT-eps-converted-to.pdf i mg/TCP_VC_TD_AVE_CONNS_ACT.eps). executed. Package epstopdf Info: Result file: . ! Package pdftex.def Error: File `img/TCP_VC_TD_AVE_CONNS_ACT-eps-converted-to. pdf' not found.