I finally got this working. For anyone looking for some more information about this, visit: http://wordpress.stackexchange.com/questions/19238/how-do-i-add-blog-as-a-prefix-to-permalink-structure-for-blog-posts-tag-pages
I ended up walking myself through to a fix with some extra help. It was some weird behavior with having the Category Base set as “blog” along with everything else.
