Only CHMOD the directory and the files to 777, was the only case in which they would download. I tried other combinations too.
did you try the directory permissions set to 755 AND file permissions set to 644? this is a yes or no answer.
My root .htacess file has this in it..
<Files .htaccess> Deny from all </Files>
this context specification only affects access to files that end in ".htaccess", so you can ignore this directive for this problem.
Then why would it work at CHMOD 777 and nothing else.
the only difference between 777 and 755 is that in the first case the group and user also have permission to write to the directory instead of just the owner. the difference should be irrelevant for a read operation.