I am sorry man, i see now you are using Microsoft IIS Server at Go Daddy.
I never configured htacces for MS IIS server. Don´t even now if it is .htacces or htaccess.txt.
I read that Go Daddy´s IIS servers accept .htacces, but be aware that they maybe have up to one hour to accept those changes.
Try to ask at Go Daddy forum. I saw they have some big community. Someone would help you quickly. If you changed something in Go Daddy hosting panel (redirect) say about it at GD forum.
Here is mine .htaccess (on Apache server). Notice
bolded parts. (I have also Joomla in subfolder as you and works without problems)
##
# @version $Id: htaccess.txt 13415 2009-11-03 15:53:25Z ian $
# @package Joomla
# @copyright Copyright (C) 2005 - 2008 Open Source Matters. All rights reserved.
# @license
http://www.gnu.org/copyleft/gpl.html GNU/GPL
# Joomla! is Free Software
##
#####################################################
# READ THIS COMPLETELY IF YOU CHOOSE TO USE THIS FILE
#
# The line just below this section: 'Options +FollowSymLinks' may cause problems
# with some server configurations. It is required for use of mod_rewrite, but may already
# be set by your server administrator in a way that dissallows changing it in
# your .htaccess file. If using it causes your server to error out, comment it out (add # to
# beginning of line), reload your site in your browser and test your sef url's. If they work,
# it has been set by your server administrator and you do not need it set here.
#
#####################################################
## Can be commented out if causes errors, see notes above.
#Options +FollowSymLinks
#
# mod_rewrite in use
RewriteEngine On
# Change yourdomain.com to be your main domain.
RewriteCond %{HTTP_HOST} ^(www.)?
nameofmysite.com$ [NC]
# Change 'subfolder' to be the folder you will use for your main domain.
RewriteCond %{REQUEST_URI} !^/
nameofjoomlafolder/
# Don't change these lines.
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
# Change 'subfolder' to be the folder you will use for your main domain.
RewriteRule ^(.*)$ /
nameofjoomlafolder/$1 [L]
# Change yourdomain.com to be your main domain again.
# Change 'subfolder' to be the folder you will use for your main domain
# followed by / then the main file for your site, index.php, index.html, etc.
RewriteCond %{HTTP_HOST} ^(www.)?
nameofmysite.com$ [NC]
RewriteRule ^(/)?$
nameofjoomlafolder/index.php [L]
########## Begin - Rewrite rules to block out some common exploits
## If you experience problems on your site block out the operations listed below
## This attempts to block the most common type of exploit `attempts` to Joomla!
#
## Deny access to extension xml files (uncomment out to activate)
<Files ~ "\.xml$">
Order allow,deny
Deny from all
Satisfy all
</Files>
## End of deny access to extension xml files
RewriteCond %{QUERY_STRING} mosConfig_[a-zA-Z_]{1,21}(=|\%3D) [OR]
# Block out any script trying to base64_encode crap to send via URL
RewriteCond %{QUERY_STRING} base64_encode.*\(.*\) [OR]
# Block out any script that includes a <script> tag in URL
RewriteCond %{QUERY_STRING} (\<|%3C).*script.*(\>|%3E) [NC,OR]
# Block out any script trying to set a PHP GLOBALS variable via URL
RewriteCond %{QUERY_STRING} GLOBALS(=|\[|\%[0-9A-Z]{0,2}) [OR]
# Block out any script trying to modify a _REQUEST variable via URL
RewriteCond %{QUERY_STRING} _REQUEST(=|\[|\%[0-9A-Z]{0,2})
# Send all blocked request to homepage with 403 Forbidden error!
RewriteRule ^(.*)$ index.php [F,L]
#
########## End - Rewrite rules to block out some common exploits
# Uncomment following line if your webserver's URL
# is not directly related to physical file paths.
# Update Your Joomla! Directory (just / for root)
RewriteBase /
########## Begin - Joomla! core SEF Section
#
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteCond %{REQUEST_URI} !^/index.php
RewriteCond %{REQUEST_URI} (/|\.php|\.html|\.htm|\.feed|\.pdf|\.raw|/[^.]*)$ [NC]
RewriteRule (.*) index.php
RewriteRule .* - [E=HTTP_AUTHORIZATION:%{HTTP:Authorization},L]
#
########## End - Joomla! core SEF Section
########## Begin - 3rd Party SEF Section ###########
## Use this section if you are using a 3rd party (Non Joomla! core)
##SEF extension - e.g. OpenSEF, 404_SEF, 404SEFx, SEF Advance, etc
RewriteCond %{REQUEST_URI} ^(/component/option,com) [NC,OR] ##optional - see notes##
RewriteCond %{REQUEST_URI} (/|.htm|.php|.html|/[^.]*)$ [NC]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule (.*) index.php
# ########## End - 3rd Party SEF Section
