Subfolder setup – error in creating a new site – page not found

Hi,
I have tried to find a solution for this problem and had no luck.

I had the subdomain setup working initially and then decided to switch to subfolder setup. I made the necessary changes to wp-config and .htaccess

Here’s how my htaccess looks

# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]

# uploaded files
RewriteRule ^([_0-9a-zA-Z-]+/)?files/(.+) wp-includes/ms-files.php?file=$2 [L]

# add a trailing slash to /wp-admin
RewriteRule ^([_0-9a-zA-Z-]+/)?wp-admin$ $1wp-admin/ [R=301,L]

RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -d
RewriteRule ^ - [L]
RewriteRule  ^[_0-9a-zA-Z-]+/(wp-(content|admin|includes).*) $1 [L]
RewriteRule  ^[_0-9a-zA-Z-]+/(.*\.php)$ $1 [L]
RewriteRule . index.php [L]
</IfModule>
# END WordPress

It looks like the subfolder setup went through ok, but when I try to create a site (after putting in the site address, site title and admin email) I get a blank page.

When I refresh the page, it says the site already exists.

It is not listed under ‘My Sites’. But it is listed in the Network Dashboard – All sites.

When I try to visit the page, it goes to my homepage. But when I try typing the full url in the address bar, i get to the page (it looks like a new site page), but it says ‘This is somewhat embarrassing, isn’t it?’

I am using bluehost, and it is on a shared hosting plan and so they cannot do AllowOverride FileInfo Options

They also said that the mod_rewrite was enabled.

I noticed that there was no user setup in this new site and so when I create a user the site shows up under ‘my sites’ but that’s all… i cannot update the site name or add post or change settings. it goes to a blank page.

Any help will be greatly appreciated! Thanks in advance!