Make sure you looked at the right configuration file, it is in httpd_config.xml, not the virtual host coniguration file.
If that is not the problem, you have to compare the configuration of two virtual host carefully.
Please check "setUIDMode", and make sure the corresponding file/directory is not owned by "root" or other system user. LSWS won't start a CGI script as a privilege user.
If possible, enable debug logging for that virtual host and set "debug level" to "high" at server level.