Okay that fixed my issue. The problem was that the original blog page I created was not permanently deleted, but rather in the trash.
If you go to Dashboard>Pages, you’ll see (underneath the “Edit Pages” title) the listing of all your pages, along with their current status (all, published, draft , trash). click the trash link and delete your pages from your trash bin. Once this is completed, you’ll be able to change your recreated blog page to have the /blog permalink
Hope this works for you 🙂
Trying this now orbital…..I think I used the trash feature instead of delete my original blog page. Found this link.. http://en.support.wordpress.com/deleted-posts-and-pages/
I’m having this same problem orbital….hoping that someone can help us out. I’ve been looking in the wordpress database, not sure if I’m supposed to delete records in the wp_posts table where I originally created and deleted the blog page…???