ROR application behind a WP site

I have a WP site that we use for marketing for our Ruby application. We have both of them on the same server. The marketing site is set up for the primary http://www.example.com and the application is http://www.example.com/app/

I want use SEO friendly permalinks but when I do it doesn’t let me access the application any more.

I know it’s a simple htcaccess issue but my developer can’t seem to figure it out or hasn’t taken the time to. Please advise.