- Try clear cache. Configuration - Advanced - Performance. Or delete all files an directories in <documentRoot>/app/cache
- Else, check you module is attached to all hooks (Design - Positions or Modules - Installed Modules - Your Module - Configure - Maintain Hooks). If not, restore the module (Installed Modules - At the module choose Restore).
- displayBlockPosition1 is not a standard hook. It must be called somewhere, Controller, Module of Template (I guess the last one). Compare your template code and module code between your 1.7.6 and 1.7.7
Success.