That looks all right to me, that's the standart wordpress htaccess indeed.
No, there should not be any .htaccess file in the plugin directory, so it's ok as well.
Well, it means that the server is restricting the access to php files outside the root directory I guess.
Take fore example this file: http://wordpress.philiplee.ie/~philiple/wp-content/plugins/ajax-search-pro/filters.txt
It's accessible because it's a txt file.
Now try this one: http://wordpress.philiplee.ie/~philiple/wp-content/plugins/ajax-search-pro/functions.php
That's a php file it should be executed, but it's not, the server returns with an error 500, which is very unusual and it should not happen. It must be restricted somewhere, either on CPanel, or in the apache vconfig files, or the permissions are below 755.
Other solution would be to bypass the thumbnail generating script and just show the raw image found. That's not a very convenient option, because it would show the unresized, unscaled images.Best,
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