Directories Outside Drupal
The last couple of days I have been converting my oldest site, whitelakeworld.com, to Drupal 7.12. I came across the problem of not being able to access a password protected directory in the web root outside of my Drupal install. I had the same problem when I converted this site to Drupal a while back and let it stump me.
On both sites I have a script that runs from cron to update a section of the site devoted to affiliate products. It simply takes a datafeed file and uses it to update the database.
The directory with the problem held a little admin that would let me run the script manually and was password protected. Every time I would access the script via a browser it would result in a 404 file not found.
After considerable time the solution was found thanks to thesitewizard.com. It involved a simple edit to the main Drupal .htaccess and one in the directory I was trying to access. Also a 401 error file was required in Drupal root. I'll let anyone interested follow the link for a better explanation than I could give.
Edit: After making changes in pchouskeeping.com to make this work I see that for me all that was required was adding one line to .htaccess in Drupal root and the 401.html file.