htaccess to forward domain name to a folder results in 500 Internal Server Error

[#1]

I'm OK with basic htaccess... and my setup has been working for about a year since I first created it.
I have a folder on the CGI server that contains HTML files only (no php). I have an .htaccess file in the root directory that forwards two domain names to the folder in question and one other folder on the CGI server (the other folder contains a Wordpress installation). As I said this arrangement has been working for about a year.
The other day I decided to temporarily upload Worpress into the folder that has just HTML files. Trying to be clever I renamed the Wordpress index.php file to index1.php as I have an index.html file the folder and decided to implement the Worpress installation navigating to the index1.php - it worked.
I can't remember exactly when I got the 500 Internal Server Error but I renamed the index.html to index1.html and the Wordpress index1.php to index.php.
Anyway I started to get the Server Error so I deleted the Wordpress files and changed the index1.html  back to index.html.
I still got the error.
I contacted Plusnet - they don't seem to have any idea. On their suggestion I deleted the .htaccess file in the root directory and the folder in question with content and then re-uploaded these files. Still got the error.
Plusnet can't seem to help me and directed me to the Community Forum.
I am able to edit the .htaccess to point to another folder and it works but with some other folders it doesn't.
If I navigate directly to the folder in question e.g. ccgi.myusername.force9.co.uk/folder instead of www.mydomainname.co.uk it works!
I have even created a new folder and uploaded the content and edited the .htaccess acordingly and I still get the error.
Throughout all of this the other domain name that is directed to it's folder has continued to work.
Any ideas? Am I missing something really obvious?
Oh I'm on the Plusnet CGI and not PAYH.
Thanks

[#2]

I've had a quick look at this on my lunch break, hope you don't mind.
The rewrite rules were resulting in an infinite loop, so I added in another condition to not redirect if it has already been redirected. Not sure if this fixes your original problem but the server errors have now gone.

[#3]

Fantastic - Thanks Ben !
Interestingly the code you put in is what I originally had - I was following the instructions at http://community.plus.net/forum/index.php/topic,46224.0.html.
But as you can see somewhere in the thread someone suggested that the 'RewriteCond %{REQUEST_URI} !^/foldername/' wasn't required - and indeed it wasn't until now !
Thanks again

[#4]

That's weird, I can't see how it would ever work without it. I'll see if anything has been changed recently on CCGI here which might have caused it to stop working.