It seems like Options -Indexes might be a better option in .htaccess .... and actually, it would be better to add this to the top level .htaccess as it's not generally a good practice to allow directory listing anywhere.
open your root directory/.htaccess
to the top of the file (it doesn't really matter where you put it, as long as it's not inside another directive)
If you use deny all, the plugin can't read itself and will return a permissions issue which effectively brings the site down.
You don't have permission to access /wp-content/w3tc/pgcache///_index.html_gzip on this server.
If you have a VPS, maybe install opcode (APC or XCache) so you're not using disk cache - it sounds like this only affects disk cache.
thanks for sending that out! I haven't kept up with my rss feeds the past few days!