Post Name Permalinks Causing Crash

I have one wordpress installation in my root folder working perfectly using 3.8.1. It allows me to have Post Name Permalinks.
A second MANUAL wordpress 3.8.1 installation in a subfolder (using a second SQL database with the wp_config file adjusted accordingly) works until I try to change permalinks to anything other than default. When I attempt a permalink change, I get a an error screen. At first I thought it was a change incompatible with a newly installed theme. No. Even without changing the theme, the site crashes when attempting to change the Permalinks. I have even tried to install an archived version of WordPress. No luck. I tried to remove the %postname% setting in phpMyAdmin so that I would not have to start from scratch and entirely uninstall and reinstall. That does not work either. I have to create an entirely new datebase (use of the one just used for the installation just crashed with crash again even with a fresh install). All of these various attempts and they all end in an error screen.
Here are the sites right now:
https://tracyjames3d.com/feetandpaws_php2.8.6
https://tracyjames3d.com/feetandpaws_php3.8.1
and of course the working website https://tracyjames3d.com
Here is the status of my server technologies in case this might be a culprit: WINDOWS, PHP 5.1, ASP 1.0, ASP.NET 1.1, MYSQL 5.0, MSSQL 2012, 2005
I am sure one needs more information to help trouble shoot. Just let me know what that is and I will do my best ?? Thank you!