Private files return 404 not found I have a problem whereby any files uploaded into the private directory cannot be viewed - returning a 404 not found error. The images upload ok and get placed in sites/default/files/private directory. The image path when trying to view is in the form /system/files/image.jpg which I believe is correct.

Firstly I found that there are conflicts with the Fast 404 module. Disabling this module makes the private files now work on my staging server, but not on our live server. 

Could there be any server-side settings that could be affecting this?

What else should I be checking?
Merely disabling the Fast 404 module isn't enough if you are calling fast_404_ext_check(); in settings.php.  Be sure you've removed the Fast 404-related settings from settings.php.

Due to the way private files are implemented in Drupal, you will never be able to use private files with the extension-checking features of Fast 404.