that is very strange. all should be working now. especially since it's working on your remote machine.
so let;s go through what we know we know:
1- apache owns the log directory, and is the user that php runs as
2- the logs directory is world-writable (777)
3- it works on your remote host
so, we're sure it's a problem with your local machine, and it seems to me that it's most-likely still a user/group problem.
its up to you of course, but if you want to give me ssh access to your local machine, I'll see if I can find anything. This is really odd though, I'm out of simple ideas...
give me an email address and I'll write off the board - if you want to give me ssh access that is, I would understand if you don't, but I don't have any other suggestions otherwise.
I figured that changing the ownership would do the trick for sure...
[edit]
actually, let's rule out one more thing, run an "ls -la" within your logs directory and post the results. then we'll go from there...
[end edit]