Okay well it most likely has something to do with the fact that you are using a subdomain, since you have also setup your own 404 page and that is only caught if you visit a site that is on your main domain and not your subdomain, for example:
http://chiddypeople.com/short/7 shows your error page while
http://short.chiddypeople.com/7 it shows the 000webhost error page
Something similar is most likely affecting the rewrite, I suggest putting the .htaccess file in the folder which should then cause it to affect that subdomain.