HTTP Error 404 - File or directory not found error

Environment: 
Windows 2003 Server with IIS6
IIRF 2.1
Joomla 1.5.9
AceSEF 1.3.13

Problem:
Created a joomla menu item at footer that display a single article.  When clicking on it, shows a nice SEF URL but error 404 The page cannot be found.

IiRFGlobal.ini   as follow:
----------------------------------------------------------------------------
RewriteFilterPriority MEDIUM
NotifyLog OFF
RewriteEngine ON
StatusUrl /iirfStatus  RemoteOk
-----------------------------------------------------------------------------

IiRF.ini   as follow:
----------------------------------------------------------------------------------------
RewriteCond %{HTTP_URL}             (/|\.htm|\.php|\.html|/[^.]*)$   
RewriteCond %{REQUEST_FILENAME}     !-f
RewriteCond %{REQUEST_FILENAME}     !-d
RewriteRule (.*)                /index.php                      [U,L]RewriteCond %{HTTP_URL}             (/|\.htm|\.php|\.html|/[^.]*)$   
RewriteCond %{REQUEST_FILENAME}     !-f
RewriteCond %{REQUEST_FILENAME}     !-d
RewriteRule (.*)                /index.php                      [U,L]
MaxMatchCount 10
-----------------------------------------------------------------------------------------------------

.htaccess  (3kb size) as follow:
------------------------------------------------------------------------------------------------------
##
# @version $Id: htaccess.txt 10492 2008-07-02 06:38:28Z ircmaxell $
# @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

########## 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!
#
# Block out any script trying to set a mosConfig value through the URL
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 tag in URL
RewriteCond %{QUERY_STRING} (\|%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 /  << ALSO TRIED removing the '#' without success >>


########## 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
-----------------------------------------------------------------------------------------------------------

Modified configuration.php file
from:
var $live_site = ''
to:
var $live_site = 'http://www.mydomain.com'

AceSEF Configuration Advanced tab:
Set  Base href value = Use home page

Thanks very much for your assistance.