When I remove permalinks it automatically deletes the .htaccess file. Is this normal ?
I would hope not, would if I had some special cool
code in there, like to speed p my site, and then found it all missing?
but this may be an issue that only the host can solve, whenever I make a sub-domain and the folder was already there, it just does its dns thing and everything is ok, but yours is acting like it sees the sub-domain and the folder as if they were separate,
check spelling on the folder, by chance there isnt two folders, are there?