I had to make a change to WebUtils.cs to get this to work in a sub directory set as a application.
 
In WebUtils.GetWebResourceUrl(...) change the return to
 
var root = VirtualPathUtility.ToAbsolute("~/");
 
return root + (string)_getWebResourceUrlMethod.Invoke(null,
new object[] { Assembly.GetAssembly(typeof(T)), resourceName, false });