Custom URL structure not working

My website is http://www.statesideeuro.com and my wordpress blog is located at www.statesideeuro.com/blog and I need help with permalinks. The blog works mostly and so does all the admin stuff. When I go to the settings area, my wordpress url is .com/blog and my website url is .com

However, when I go to the permalinks section, the default setting EXCLUDES the /blog all together. The default is http://www.statesideeuro.com/?p=123 and I want it to be http://www.statesideeuro.com/blog/?p=123

I did these steps not long ago to give wordpress it’s own directory. It all worked except step 11 obviously. http://codex.wordpress.org/Giving_WordPress_Its_Own_Directory

I think this is the root of my problems.

Whenever I make a new post, it puts the individual post at http://www.statesideeuro.com/?p=123, which is default and this doesn’t work. Only my homepage shows up at that url. When I make a new post, it shows up on the BASE .com/blog page, but when you click a link on the right side to an older post, it takes you to my site homepage and not the post. This also happens when I try to put up an item on my store (it’s closed now while I work it out).

Thanks!