I have a WPMU install set up at http://www.myexample.com
It is using subdirectories. I then remove the /blog/ part with a rewrite_rules_array function.
When I create a new blog (e.g. http://www.myexample.com/staffblog) it is created correctly but if I try to access that blog I get a 404 error (the 404.php from the main site theme). Additionally, if I try to access the the admin area for my new blog I just end up back in the admin area for my main blog (www.myexample.com/wp-admin instead of http://www.myexample.com/staffblog/wp-admin).
The very bizarre thing is that I have an exact replica of the entire setup on a subdomain (sandbox.myexample.com) which works correctly. All the setting are the same except for one thing I noticed. The sandbox.myexample.com/staffblog contains a "Transient Random Seed".
Could this have something to do with it? Or could it be related to the "www" on the URL? If I go to myexample.com/staffblog it sends me to http://www.myexample.com.
Any ideas appreciated. It is difficult to test things on the main site due to its constant use, hence the sandbox but if they are behaving differently it makes things rather difficult.