URL rewrite issue with images in subsites redux

I year ago I started this thread Images not working in subsites. It was closed so I am starting this thread to hopefully solve my issue. The issues with image uploads are still occurring, most of the info is the same as the old thread but I’ll include a little here.

current root .htaccess

RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]

# uploaded files
 RewriteRule ^([_0-9a-zA-Z-]+/)?files/(.+) wp-includes/ms-files.php?file=$1 [L]
# RewriteRule ^files/(.+) wp-includes/ms-files.php?file=$1 [L]

# add a trailing slash to /wp-admin
RewriteRule ^([_0-9a-zA-Z-]+/)?wp-admin$ $1wp-admin/ [R=301,L]

RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -d
RewriteRule ^ - [L]
RewriteRule  ^([_0-9a-zA-Z-]+/)?(wp-(content|admin|includes).*) $2 [L]
RewriteRule  ^([_0-9a-zA-Z-]+/)?(.*\.php)$ $2 [L]
RewriteRule . index.php [L]

#protection against script injections
RewriteCond %{QUERY_STRING} (\<|%3C).*script.*(\>|%3E) [NC,OR]
RewriteCond %{QUERY_STRING} GLOBALS(=|\[|\%[0-9A-Z]{0,2}) [OR]
RewriteCond %{QUERY_STRING} _REQUEST(=|\[|\%[0-9A-Z]{0,2})
RewriteRule ^(.*)$ index.php [F,L]

#compress text,html,javascript,css,xml:
AddOutputFilterByType DEFLATE text/plain
AddOutputFilterByType DEFLATE text/html
AddOutputFilterByType DEFLATE text/xml
AddOutputFilterByType DEFLATE text/css
AddOutputFilterByType DEFLATE application/xml
AddOutputFilterByType DEFLATE application/xhtml+xml
AddOutputFilterByType DEFLATE application/rcc+xml
AddOutputFilterByType DEFLATE application/javascript
AddOutputFilterByType DEFLATE application/x-javascript

# Expires Headers - 2678400s = 31 days
<ifmodule mod_expires.c>
ExpiresActive On
ExpiresDefault "access plus 24 hours"
ExpiresByType text/html "access plus 7200 seconds"
ExpiresByType image/gif "access plus 2678400 seconds"
ExpiresByType image/jpeg "access plus 2678400 seconds"
ExpiresByType image/png "access plus 2678400 seconds"
ExpiresByType image/ico "access plus 2678400 seconds"
ExpiresByType text/css "access plus 1 second"
ExpiresByType text/javascript "access plus 2678400 seconds"
ExpiresByType application/x-javascript "access plus 2678400 seconds"
</ifmodule>

# Cache Headers
<ifmodule mod_headers.c>

# Cache specified files for 31 days
<Filesmatch "\.(ico|flv|jpg|jpeg|png|gif|swf)$">
Header set Cache-Control "max-age=2678400, public"
</Filesmatch>

# NO CACHE for html/php files.
<Filesmatch "\.(html|htm|php)$">
Header set Cache-Control "max-age=0, no-cache, no-store, must-revalidate"
</Filesmatch>

# Cache PDFs and CSS for a day
<Filesmatch "\.(pdf|css)$">
Header set Cache-Control "max-age=1, public"
</Filesmatch>

# Cache Javascripts for 31 days
<Filesmatch "\.(js)$">
Header set Cache-Control "max-age=2678400, private"
</Filesmatch>
</ifmodule>
FileETag none

Current /directory .htaccess

RewriteEngine On
RewriteBase /directory/
RewriteRule ^index\.php$ - [L]

# uploaded files
RewriteRule ^([_0-9a-zA-Z-]+/)?files/(.+) wp-includes/ms-files.php?file=$2 [L]

# add a trailing slash to /wp-admin
RewriteRule ^([_0-9a-zA-Z-]+/)?wp-admin$ $1wp-admin/ [R=301,L]

RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -d
RewriteRule ^ - [L]
RewriteRule  ^([_0-9a-zA-Z-]+/)?(wp-(content|admin|includes).*) $2 [L]
RewriteRule  ^([_0-9a-zA-Z-]+/)?(.*\.php)$ $2 [L]
RewriteRule . index.php [L]

I have two mutlisite installs running on this server the root http://www.rappahannock.edu and our directory http://www.rappahannock.edu/directory. Today I did an image upload test and turned on rewrite logging and these are the results.

[Log moderated as per the Forum Rules. Please use the pastebin]

Identical except for lines 7-8(indented). Does anybody have any idea what is going on here?