File(/) is not within the allowed path(s)

I just upgraded to 7.x-2.5 and got the same error.

Is it confusing the relative path '/' (aka <front>) with the Linux root directory?
That would explain the permission problem.

Hmm, it appears that PHP is configured on your servers in such a way that it's taking exception to something that Pathologic tries to do to see if you are linking to a file. I'll try to replicate the error on my end and work around it. Thanks for bringing it to my attention.

Okay, I was able to replicate the problem and worked out a workaround that'll hopefully stop this from happening. Please check out the 2.6 release, which will likely be available by the time you read this.

I still get this error with Drupal 7.33 and Pathologic 7.x-2.12 in shared hosting with PHP 5.4.30.

It looks like this:

Warning: is_file(): open_basedir restriction in effect.
File(/home/MYUSER/domains/MYDOMAIN/public_html/../../../../../) is
not within the allowed path(s): (/home/MYUSER/:/tmp:/usr/share/pear) -
_pathologic_replace() (eilutė 342 iš
/home/MYUSER/domains/MYDOMAIN/public_html/sites/all/modules/pathologic/pathologic.module). 

Talkless, what input are you using to cause that error?

Example links are /kategorijos/alius?page=2 which translates to taxonomy/term/something (default Views taxonomy view of teasers), or simply /?page=66 for frontpage view.

These errors shows only once, and repeats only when cache is cleared.

Now after some diging, I've found one exact article, which is shown in some page, that has HTML inside editor like this:

 narius...<a href="../../../../../"><br /></a></p>

I have no idea how that anchor got there, maybe author pasted it from external text editor, and that strange link appeared... somehow..?

This article was written using old, no longer used FCKEditor input format, from times when sites was running on Drupal 6. Could this be upgrade issue?

I've restored Drupal 6 backup, that anchor is there (since 2010).