Are you sure you have the test site in the correct location?
You say it is in:
http://www.theteelfamily.com/TeelMainSite/Test/Site/Blank.html
But I find the Test site here:
http://www.theteelfamily.com/Test/Site/Blank.html (see image)
In Safari type Cmd-Option-A to open the Activity window.
I checked with my own files and found that the way you do it will work. Assuming the file is there, of course.
Personally I would separate custom pages from folders created by iWeb (see second image).
That way I can test & use them without iWeb. [See the page|http://web.mac.com/wyodor/iFrame>.
Regarding the 404 error. Your webserver expect a file to display the error. But that file isn't there. Check the webserver configuration.
!http://web.mac.com/wyodor/Images/teel.png!
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!http://web.mac.com/wyodor/_Images/htmlwidget.png!