If it works in one directory and not in another then it can't really be a module problem. It has something to do with what directory it's in. I think I know what the problem is. What happens if you move your .htpasswd file to /etc/httpd/htpasswd and changing the .htaccess file to point to it there instead, just to see how that effects it. P.S. I always put the password file outside of the directory structure of the web pages being served.