Still no luck. However I would like to confirm a few things about placement of .htaccess files.
First, I've "Link Protection" turned on because dreamhost requires me to have at least one of the options to be on to enable .htaccess.
Second, I've put .htaccess file directly inside the "Try" folder. Also I've enabled "Try" for .htaccess.
If I move .htaccess to root, do I need to enable .htaccess for root folder as well?
Also, which root? ftp root OR www root?