Andrea, can you explain why the rewrite limit would need to be higher than 10? That error message tells you to bump the limit past whatever you have set in httpd.conf. It defaults to 10 because once mod_rewrite has repeated the rewrite 10 times there is a pretty good chance it is in a loop. For completeness sake I set the limit to 50 and this doesn't change anything (except the error message where the 10 is replaced with 50 of course).
BTW, the error I get on my development server is similar, but is issued by mod_rewrite:
mod_rewrite: maximum number of internal redirects reached. Assuming configuration error. Use 'RewriteOptions MaxRedirects' to increase the limit if neccessary.
And I do understand that these directories are virtual, but that doesn't explain why it would generate a server error instead of a 404. Or am I missing something?
ipstenu, are the plugins relevant if I can disable every single one of them and still see this issue?
There is something strange happening here because if I remove the following line from the htaccess then the error goes away:
RewriteRule ^([_0-9a-zA-Z-]+/)?(wp-(content|admin|includes).*) $2 [L]
Of course, this is the line that makes the admin page accessible for the non primary blogs, so it is necessary.
The strange thing is that this line shouldn't kick in for a path off the primary blog's "wp-content" because the pattern matches "subfolder/wp_content" where "subfolder" here is one or more characters.
I know this is all a little obscure, but I was hoping that someone with experience of the issue could point me in the right direction. I'm pretty sure there are many multisite installs out there doing this and none the wiser, because you need to be watching your server error log to even know it is happening.
UPDATE: Should have done this earlier, but I have created a brand new, bog standard multisite install on my development server. No plugins activated, and the default MU home page theme. The same problem occurs.