Make sure apache respects that. Check httpd.conf

Try

ln -s /home/ckarma/uploads/ cache

i.e. the data directory itself as link target.

Also, permissions settings for the symbolic link are irrelevant as the permissions of the link target are used.

@iionly what file, folder or location is one expected to insert that code line??

Dumb Simple method is a registration of the users with those names and then ban'em all ;)

Another way is a blacklist in validate username

The proper way of doing it is by creating a plugin hook for registration action > cross check the provided username with the list and block the registration, if a matching word is found. This needs some knowledge on Elgg developments. If you are not familiar, you can hire a dev for this purpose.