Paging broken after WordPress 4.0 Update

We’re having a few issues with paging in Twenty Fourteen. The function

twentyfourteen_paging_nav();

Seems to be creating paging links that either point to the same page, or point to a 404 error.

The links created by the function look like:
http://www.domain.com/http://www.domain.com/whats-new/page/2/

We’re using the function in a custom template alike so:

$paged = (get_query_var('paged')) ? get_query_var('paged') : 1;
$args = array(
'orderby'=>'date',
'order'    => 'DESC',
'posts_per_page' => '15',
'post_type' => 'post',
'paged' => $paged
);
// The Query
query_posts( $args );
if (have_posts()) : 

// Previous/next post navigation.
twentyfourteen_paging_nav();

while ( have_posts() ) : the_post();
get_template_part( 'content', 'featured-post' );
endwhile;
else: 

// Previous/next post navigation.
// twentyfourteen_paging_nav();

endif;
wp_reset_query();

We’ve tried deactivating all plugins as well as switching to the newest twenty fourteen default theme and still no luck. The paging functions do not seem to work correctly.

We’ve search through the DB to see if there is any anomalies with URL’s, and it all seems fine.

I have a feeling this is something specific to our site and not systemic in the 2014 theme itself. Regardless any feedback or help would be greatly appreciated, as I’ve found many other users that are experiencing the same issue paging, WordPress 4.0 and the 2014 theme.

THANKS!