try to change "throwExeptions" in your bootstrap:
$frontController->throwExceptions ( false );

I also don't have modular directory structure (like -> zuhair)

I removed also:
$frontController->setParam ( 'useDefaultControllerAlways', true );

in my case it's working when I call:
http://.../no_existing_controller/
and
http://.../no_existing_controller/no_existing_action/

but when I hit
http://.../existing_controller/no_existing_action

nothing is happening, and I dunno why...