Should we handle this redirect differently?

[altecdesign]

So our question is should we handle page redirection/rewriting in php or in .htaccess (with a specific problem we are running into outlined below).

We have an ecommerce store in a subfolder of our site (example.com/store/).  In the next folder down we have a group of widgets(www.example.com/store/widget-group1).  Recently we put a .htaccess redirect in the top level folder (example.com/store/.htaccess), in order to re-write some URL’s and also 301 a page to another page.  This seems to be negatively affecting our /widgets-group1/ subfolder however (organic traffic to example.com/store/widget-group1) took a nose dive 3 days after putting the .htaccess redirect in place on the /store/ folder and it has not recovered 8 days later).

*Nothing appears outwardly wrong with the current setup to the eye when viewing the pages or requesting as googlebot (the only issue being the nose dive in organic traffic lol)

*both subfolders are setup in apache config file to allow local overrides of .htaccess as follows:

<directory store="" widget-group1="">Options -Indexes FollowSymLinks -MultiViews
AllowOverride All
Order allow,deny
allow from all</directory>

<directory store="">Options -Indexes FollowSymLinks -MultiViews
AllowOverride All
Order allow,deny
allow from all</directory>

[customerparadigm.com]

Without seeing the actual 301s and tracing it all on the server, my guess is that that what might have happened during the 301 process is that all of the server rules in .htaccess is forcing a user to go through multiple "hops" before the redirect is complete.

This is a simplified version, but what might be happening is something like this:

/store/widget-group1/ --> /store/widget-group1/index.php --> /store/widget-group1/index.html  --> /store/index.php?widget-group1

If this is the case, I'd try to create a 301 that reduces the number of hops.

This page discusses how Matt Cutts of Google shoes that after a few 301 hops, Google may give up crawling:
http://www.mktdojo.com/matt-cutts-discusses-301-redirect-limits/

Hope this helps...