I just received a call from my recruiter stating that they cannot represent me for a position because I had previously applied for a different position within this company who's reporting manager is the same as the position they were to represent me on and because my resume was within that companies database. Can the hiring manager still contact me directly for this position which I was disqualified representation by the recruiter?
The recruiter has disqualified you because if he sends in your name, he won't get paid. Yes the company can contact you. But are they aware of your interest, likely not. It might be best to directly apply for the position.
Absolutely. The recruiter has removed themselves from the transaction, so you and the company are free to do as you wish. I'd suggest sending your resume along to the company directly, to make sure they know of your interest.
Now whether the company is willing to talk to you is a different story.