another CI in subdirectory?

[eluser]danmontgomery[/eluser]
You seem to be mixing and matching your .htaccess

Code:

RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d

Will only route paths that do not exist

Code:

RewriteCond $1 !^(index\.php|images|robots\.txt|css)

Will only route things not listed here... Since you're already not routing existing files & directories, this line will never do anything. Unless these files don't actually exist, in which case you'd just get an apache 404 instead of a CI 404.

Since you have a separate installation in /testnew, you would need a new htaccess for /testnew, and you would need to change RewriteBase from / to /testnew/