After a lot of struggle with virtualenv/virtualenvwrapper I decided to remove all virtualenvs and re-install the packages.
root> su myuser
myuser> sudo pip install virtualenv
myuser> sudo pip install virtualenvwrapper
I proceeded to add this to my unix users .bashrc file.
export WORKON_HOME=$HOME/.virtualenvs
export VIRTUALENVWRAPPER_PYTHON=/usr/bin/python2.7
source /usr/local/bin/virtualenvwrapper.sh
When I source .bashrc I get about 20 error lines ending with IOError: [Errno 13] Permission denied: '/root/.virtualenvs/premkproject'. I'm running out of ideas...
I have done my homework and tried every suggested solution I could find. I'm running Ubuntu 12.04.