I just wanted to give your plugin a go, but have encountered the same issue.
I see this as "resolved", but can't find a workaround anywhere here. Also signed up for beta testing, but can't find a link to get the latest beta. I guess I'll have to give this a miss for now - shame, sounds promising.
I find it somewhat hard to believe I am installing a credible plugin, if it has obviously not been tried with this very usual setup of having Wordpress installed in a subdirectory, which is not only recommended, but sometimes even necessary (to be able to have other HTML in a subdirectory "next" to wordpress and to function without wordpress interfering).
I mean, its the 3rd and 4th box of the General Settings of Wordpress, right after the Name and Tagline of the websites and includes a link to the instructions, so I would say its not something unusual at all ;)