I found this page where they are having a similar problem
http://www.phpbuilder.com/board/showthread.php?t=10310794
Your error seems to say that configuration.php on line 1 is sending headers before the session can start causing an error. One thing they said is a blank line or space might cause it. If you open your configuration.php file in a text editor like Notepad what is the first line in the file? Is it a space? You should see this on the first line with no space before it;
<?php
Someone else said you could set the session cache to public but I didn’t see anyone confirming that. More searching sugests it is usually caused by a space before the first <?php or after the last ?>.

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I found that link also and have checked the file. There is no space before the <?php or after the last ?>.
My site won’t let me login in the front end or back end either. I am at a loss so I will just reinstall Joomla in the main directory and start over. Hopefully I can copy some of the information over from my subdomain.

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Warning: session_start() [function.session-start]: Cannot send session cookie – headers already sent by (output started at