Is there any way to create a custom 404 page for a specific subdirectory only? For example, I would like to have a custom 404 page when people try to access a missing page from http://unraveled.com or http://unraveled.com/example and a DIFFERENT 404 page when people try to access a missing page under http://unraveled.com/joshua/.
Yup. Specify a different 404 page in an .htaccess file.
.htaccess files work recursively down a directory tree.
Check the Apache documents or google for the exact syntax.