It's probably the chmod 710 to the /home/username/domain/domain.com. Try chmodding it to 711.. I might have to figure out another way to secure things up.
May 5 20:21:59 blue proftpd[20543]: blue.real-hosts.com (82.43.99.151[82.43.99.151]) - FTP session opened.
May 5 20:22:06 blue proftpd[20543]: blue.real-hosts.com (82.43.99.151[82.43.99.151]) - no such user '[email protected]'
May 5 20:22:13 blue proftpd[20543]: blue.real-hosts.com (82.43.99.151[82.43.99.151]) - FTP session closed.
Check /etc/proftpd.vhosts.conf to make sure that the correct ftp password file is being used with the IP you've specified. If no virtualhost for that ip exists, it should default to /etc/proftpd.passwd .. and then look inside the password file to make sure that the anonymous account exists.
I'm not sure .. there isn't a whole lot more to check. Check to ensure that the /etc/proftpd.vhosts.conf does *not* contain a virtualhost for the main server IP..
Also make sure that the directory actually exists.. double check the permissions on all directories above it (needs 755).