Confirm that mod_rewrite is really working:
change htaccess content to:
If request to your site are redirected to google, then mor_rewrite is working. If not make sure it is enabled.
RewirteRule . http://google.com/ [R=301,L]
If it does work, then I'm not sure what the problem is. The htaccess looks like a correct wordpress htaccess.
You could check if it has the correct read/write permissions: maybe it has not enough or too few permissions (some webhosts block access to world-writable files).