404 hijacking

I have a WordPress install running in a sub-directory of ‘blog’ but I had previously set up a custom 404 page to display the URL that was mistakenly being accesses on that page in the root directory but now WP is displaying its own 404 message as a default whenever say, badrequest.php is loaded.

Any way to disable this?

I have tried editing the .htaccess file but then it breaks my permalinks and the whole ‘blog’ folder doesn’t load. Any ideas or help would be appreciated.