Do you know where to disable FTP layer mode. I found a post that mentioned something about FTP so I disabled it within Joomla. My result was that you could not install anything as nothing would upload. I believe it was in the general configuration settings area. Where did you disable this?
If you go to your Global Configuration, and click the Server tab, there's the option to enable or disable FTP.
If you disable it, however, you must make sure that your file permissions are correct. Otherwise, you won't be able to upload anything, because of a lack of permissions.