Access denied

Platform: drupal-6.10, virtual_sites-6.x-1.3

Have working host, let's call it 'www.x.org'.
Trying to create virtual host, let's call it 'www.y.org'.

Was able to set the Condition, tried creating new Primary and Secondary menus for www.y.org. Also set a mission statement, footer message, etc. for www.y.org.

When I navigate to www.y.org, I do see the new mission statement and footer. However, the menus are not appearing. Moreover, no actual content gets displayed, instead there is "Access Denied" message in the content area. If I then login as the Admin, only then do I see the Menus and Content.

I went through all the User Permissions settings and did not see anything wrong there.

Do I need to set some internal variable?

Thinking it was a subdomain problem, I changed the configuration so that instead of going to host 'www.y.org' instead use 'www.x.org/y'. Still see same thing happen (i.e. Access Denied).