The debug settings are stored in cf_root/lib/neo-debug.xml.
Has it been set to read-only or write permissions removed for the
cfuser. Cfuser is normally localsystem on windows and nobody on
linux. But, you could have used a non-default user.
If permissions look good, try opening the file in firefox and
see if there is an obvious bad entry/xml corruption. If not, try
copying a good neo-debug.xml file from another CF server.