I have recently made a duplicate copy of a customers Magento installation and put it into a subdirectory of the root. I did a dump of the database and imported it into a new database. I changed the local.xml file to reflect the new database. Now my issue comes when I try to view the site under the new subdirectory to keeps invoking the install as if the local.xml file is missing. It is clearly there in the app/etc folder within the cloned site, but still the install keeps starting. Any ideas? Below I have pasted the connection info in the local.xml file, just in case I miss typed something.

        <default_setup>
            <connection>
                <host><![CDATA[localhost]]></host>
                <username><![CDATA[stevenst_newUser]]></username>
                <password><![CDATA[bmalldo]]></password>
                <dbname><![CDATA[stevenst_storeupgrade]]></dbname>
                <active>1</active>
            </connection>
        </default_setup>