Here is how I changed my .htaccess file
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteCond %{REQUEST_URI} ^/commdemo/(.*)$ [NC]
RewriteRule ^.*$ – [L]
</IfModule>
# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>
# END WordPress
But the issue persists. One more time, if I remove all the content from the .htaccess file, the PW protected is working as it should, but my blog in no longer working.