From previous threads on this (and my memory) I bet your host is using a set of mod_security rules that includes a rule that completely disables administration functionality via profiles (it says it prevents an old security issue, but it doesn't, other than that it makes it completely impossible to change usergroups). Talk to your host
http://punbb.org/forums/viewtopic.php?id=9266
The rules, as I said, were here
#PunBB version <= 1.2.2 auth bypass exploit
SecFilterSelective REQUEST_URI "profile\.php\?section=admin\&id=.*\&action=foo"
That's the bad rule: I don't even think it fixes a real bug
Edit: And indeed, I was right
This was the real bug
http://dev.punbb.org/changeset/123
All that rule does is mess with PunBB