I'm trying to setup Rsync from one OES 11 server to another

When I run rsync: link_stat "/users" (in Data1) failed: Permission denied
(13)

Here is my rsyncd.conf

gid = root
#gid = users
read only = true
chroot = true
transfer logging = true
hosts deny = *
slp refresh = 300
....

[data1]
path = /media/nss/DATA1
hosts allow = 192.168.0.5 192.168.0.4

Tried gid as users and root

I tried this actualy on the Host ie. 192.168.0.4