REST services do not work in custom mapped directory on Coldfusion 10 server - rest

Question

I am new to REST API. I am trying to convert web application to REST-ful with an updated site design.
My work environment on development server is Coldfusion10, Windows 2008 R2 Server.
So far I successfully registered REST services to web root directory of ColdFusion 10 server and it works fine.
However, I need to register REST services in the site's directory. I have done so and it worked couple of times but, most of the time I am receiving 500 error after I edit the CFC (changing string in cfreturn from "foo" to "foo2"). I verified syntax of the CFC by going directly via url and, its ok.
I tried to add REST services in Administrator and, most of the time I get errors when adding in Administrator like this:
•Unable to refresh REST service.
Application rc could not be initialized.
Reason: The application does not contain any rest enabled CFCs.
The application does not contain any rest enabled CFCs.
I added web services in the Application.cfc
<cfcomponent output="false">
<cfset this.name = hash(getCurrentTemplatePath()) />
<cfset this.applicationTimeout = createTimeSpan( 0, 0, 1, 0 ) />
<cffunction name="onRequestStart" access="public" returntype="boolean" output="false" hint="I initialize the request.">
<cfset restInitApplication("E:\flex\html\v4\rc","rc")>
<cfreturn true />
</cffunction>
</cfcomponent>
This is the /rc/studentHandler.cfc
<cfcomponent restpath="student" rest="true">
<cffunction name="getMethod" access="remote" output="false" returntype="string" httpmethod="get">
<cfreturn "foo">
</cffunction>
</cfcomponent>
And the last file is student.cfm. I call it from http://mydevip/v4/student.cfm
<cfhttp url="http://mydevip/rest/rc/student" method="get">
<cfoutput>#cfhttp.filecontent#</cfoutput>
I tried to call cfc directly from url which works if cfc in the CF web root folder http://mydevip/rest/rc/student and, gives me error if I call cfc in custom directory.
Here is the error from application.log
"Error","ajp-bio-8012-exec-5","11/13/13","10:13:30","5C89BF4E37081433800CEF0D961170B0","object is not an instance of declaring class The specific sequence of files included or processed is: E:\flex\html\v4\rc\studentHandler.cfc'' "
Thanks,
Gena