Hi Komal -- I'm moving this discussion over to mod-pagespeed-discuss.
Usually, if your server is giving 403s after MPS is installed, it is related to mod_rewrite or some other configuration that you have that doesn't expect mod_pagespeed to rewrite URLs. In some cases (e.g. combining CSS or JS files), a set of files in lower level subdirectories may be moved up, which might not play well with your configuration. E.g. if you combine
a/b/x.css
a/c/y.css
MPS will generate their combined result in URL
a/b,_x.css+c,_y.css.pagespeed.cc.HASH.css
If you have Apache directives that forbid loading out of a/ but allow loading out of subdirectories of a/ that would then be consistent with your observation.
Another remedy is to make sure you don't have other Apache directives that would disallow the URL patterns PageSpeed generates.
-Josh