This morning I was looking at fiddler and happened to hit my own site when I noticed a 404 error.
This was working recently so why not now? Entering the full URL gave the same result. I then placed an image in the folder and it was not found either. I then moved the image up a level to /portals/_default/jquery and tried again. This time it displayed. So why not in the cycle.lite folder?
I suspected something to do with the dot in the folder name but this has been working for years. Perhaps a windows update? Anyhow I renamed the folder to cycle_lite and changed the script on my page. Now all is well :-)