Permalink Mystery

Hello,

I’ve sent many hours trouble shooting this issue.
http://www.southernwoodflooring.com

PROBLEM:
/%postname%/ will not work, default works fine.

SET UP
– Hosting company has my client’s WP install setup in a folder called htdocs (/htdocs/)
– My .htaccess file is located in the htdocs folder. The .htaccess file is automatically generated by WP
– Here is the code in the .htaccess file:

# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ – [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>
# END WordPress

I’ve always been able to fix this issue in the past by updating the .htaccess file, but I’m not having any luck with this hosting company. Could this be a server-side issue? Something that needs to be updated in Apache?

Can someone please help?