They're two separate nuke sites hosted under the same domain. One has been around for a while (probably a slightly older version of phpnuke) and one was just recently created (phpnuke 6.0). When the new one was created the older one was moved to a subdirectory beneath the new one.

Could my account cookie for the new site be interfering with the other site? I was wrong in my comment before, accounts are in fact enabled and I do have one created which I must have made a while ago. Maybe the passwords are different but the login name is the same and phpNuke is rejecting it?