bottleneck on "Permalink - 404 Error - GoDaddy"

As long as I can remember, GD .htaccess needs to add

AddHandler x-httpd-php5 .php
AddHandler x-httpd-php .php4

in other words:

AddHandler x-httpd-php5 .php
AddHandler x-httpd-php .php4
# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>

# END WordPress