setdatacell not working if the scenario setting "clear calculated data during calc" is set to TRUE

I don't really follow... Where exactly did you place your "allocation" code? Is it a Member Formula, a Custom Calculate...?

"Clear calculated data during calc" will wipe from the Data Unit any record generated by previous runs of any rule, before any rule is executed again. That means any record pointing to the same Cube/Scenario/Period/Entity/Parent/Consolidation combination of members, which was not the result of an Import or Form operation, will be deleted as soon as you trigger a new Calculate/Translate/Consolidate that involves that Data Unit.

I have a feeling your "source" records are the result of calculations, your code triggers a calculation that inevitably wipes them, and hence your code doesn't find any data to work with. If the entire Data Unit at that point is empty, the rule might not even run at all, depending on the "No Data" properties set on the Cube. If that is the case, you will have to make sure that the source data is marked as Durable.