By Passing Control over a Drupal SubDirectory

I have a utility that belongs to an organization (website) that needs to be placed in to a sub directory, however I am wondering if Drupal is preventing this, I don't get an error page from Drupal, but I can't get to the sub directory under it either.

I have set up lots of these, but just never under a Drupal directory. I use my host to do the redirection and it works fine.
for example
I set up a sub directory like
http://www.someurl.com/subdirectory

Then I use my hosting company to create a direct path with correct 755 permissions like
http://subdirectory.someurl.com

Normally this works, however I can't seem to get this to function as a subdirectory where Drupal is installed. Any ideas?

Thanks
Will

Sorry about the creation of a wiki page, I thought I had clicked on the discussion link....

Okay back to my issue... If you followed what I said above and try to type in the actual address http://research.ethicalforeclosure.com, you get an Internal 500 error page.

If I try to access the actual sub directory at http://www.ethicalforeclosure.com/research you get the 403 page error.

There is a "default.html" page in that sub directory and an .htaccess file with the following contents

Options All -Indexes
Options +FollowSymLinks
RewriteEngine On
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule ^(.*) default.html index.html index.php

The directory, the default.html file both have permissions 755

My issue is I have setup lots of these sub directory structures like this and they always work, I have just never set one up where the parent directory has a Drupal install, so since this is the only difference, this is why my assumption of Drupal is getting in the way.
I have even tried using the 'Site Building | URL Redirect' to try to assist, but that doesn't seem to work.

Any ideas?