The error seems pretty obvious, that the file listed ~/.dmrc has the wrong permissions. The fix for this is easy, at a terminal, do the following, replacing the word username with your username:
sudo chown username /home/username/.dmrc
chmod 644 /home/username/.dmrc
Except I don't have a .dmrc file to do this to, so what could be causing the error? After a bit of hunting around, I found this can also pop up if your home directory has global write permissions. The fix for this is just as easy. Again at a terminal:
sudo chmod 755 /home/username/
which gives other users read access to your home directory. Or if you'd prefer it private, then
sudo chmod 700 /home/username/
will work as well.
Log out, log in again, and the error screen should go away!