I mean what are the permissions on the bios file.

What do you get if you use PuTTY and logon to the Pi, run this command
ls -lah /home/pi/RetroPie/BIOS/{BIOS filename}

Your retroarch.cfg is wildly different to what you really need.
Here are the originals, untouched which is what I’m using

/opt/retropie/configs/all/retroarch.cfg
http://pastebin.com/raw.php?i=15Nan1C1

/opt/retropie/configs/psx/retroarch.cfg
http://pastebin.com/raw.php?i=bUYH1A5b

If you really want to edit your system specific retroarch.cfg with custom settings for RetroArch, check this video out