WordPress not generating .htaccess but tells me that (Permalink structure updated.)

Try adding the following to a manually generated .htaccess file

# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>

# END WordPress

Without knowing more about the version of WordPress used & the setup of your web-server that’s the ebst advice i can offer. Also, .htaccess should never be 777 permissions