Hi David,
Once upon a time we shipped YUI with mojoPortal, but quite a while back we switched to loading it from the google CDN by default. The setting in Web.config would only be used if you need to host the files locally like on a private network with no internet access.
Did you get the newest Web.config or try to keep an old one? You should use the new one.
Also make sure your layout.master has the StyleSheetCombiner control and the ScriptLoader control, compare your file to versions in /Data/skins which have been upgraded over time. We never touch skin files under /Data/Sites/[SiteID]/skins during upgrades in case customizations have been made.
You should have this in Web.config:
<add key="UseGoogleCDN" value="true" />
<add key="GoogleCDNYUIVersion" value="2.6.0" />
newer versions of YUI are not supported and cause problems in some places so don't change the version to a higher one.
So the path you mention is where you should install the YUI 2.6.0 files if you need to host them locally.
If you set UseGoogleCDN to false then you would need to host the YUI and jQuery and jQueryUI files locally.
Hope it helps,
Joe