Getting ‘404 Not Found Nginx’ while trying to visit WordPress post

Hello. I badly and desperately need help. So I have set up my WordPress website in a subdirectory of my domain (/blog) and is hosted in a VPS with Nginx as reverse proxy. Everything is working fine except while I’m trying to access a post. Right now when I try to access posts I get Nginx’s 404 Not Found page.

I have looked for solutions online and each and every solution says to put

try_files $uri $uri/ /blog/index.php?$args;

in the location block but it’s not working after doing so.

I even tried without /blog above.

What could be the reason for this? Am I doing something wrong? It’s been 2 days that I have been trying solutions and nothing seems to be working.

NOTES:

1. I have removed SSL configurations from the server blocks to keep it simple.

2. .htaccess file only has one item uncommented which is ErrorDocument 404 /blog/index.php?error=404.

3. I can access the posts if I change Permalinks to Plain.

CONFIGS:

Example.com.conf:

server {

       server_name example.com;
       return 301 https://www.example.com$request_uri;    

}

server {

        server_name www.example.com;

        # Web App
        location / {
                proxy_pass http://localhost:3000;
                proxy_http_version 1.1;
                proxy_set_header Upgrade $http_upgrade;
                proxy_set_header Connection 'upgrade';
                proxy_set_header Host $host;
                proxy_set_header X-Real-IP $http_cf_connecting_ip;
                proxy_set_header X-Forwarded-For $http_x_forwarded_for;
                proxy_cache_bypass $http_upgrade;
        }

        # WordPress Blog
        location /blog {

                access_log /var/log/nginx/blog_access.log;
                error_log /var/log/nginx/blog_error.log;

                root /var/www/html/example.com;
                index index.php;

                # Add a trailing slash if missing
                if (!-f $request_filename) {
                        rewrite [^/]$ $uri/ permanent;
                }

                # try_files $uri $uri/ /blog/index.php?q=$uri&$args;
                try_files $uri $uri/ /blog/index.php?$args;

                location ~ \.php {
                        try_files $uri =404;
                        fastcgi_split_path_info ^(.+\.php)(/.+)$;

                        fastcgi_index index.php;
                        # Change this to your fpm socket
                        fastcgi_pass  unix:/var/run/php/php8.1-fpm.sock;

                        fastcgi_param SCRIPT_FILENAME $document_root$fastcgi_script_name;
                        fastcgi_param PATH_INFO $fastcgi_path_info;
                        include fastcgi_params;
                }

        }
}

NGINX.conf:

user www-data;
worker_processes auto;
pid /run/nginx.pid;
include /etc/nginx/modules-enabled/*.conf;

events {
        worker_connections 768;
        # multi_accept on;
}

http {

        ##
        # Basic Settings
        ##

        sendfile on;
        tcp_nopush on;
        tcp_nodelay on;
        keepalive_timeout 65;
        types_hash_max_size 2048;
        server_tokens off;
        client_max_body_size 20M;

        # server_names_hash_bucket_size 64;
        # server_name_in_redirect off;

        include /etc/nginx/mime.types;
        default_type application/octet-stream;

        ##
        # SSL Settings
        ##

        ssl_protocols TLSv1 TLSv1.1 TLSv1.2 TLSv1.3; # Dropping SSLv3, ref: POODLE
        ssl_prefer_server_ciphers on;

        ##
        # Logging Settings
        ##

        access_log /var/log/nginx/access.log;
        error_log /var/log/nginx/error.log;

        ##
        # Gzip Settings
        ##

        gzip on;

        # gzip_vary on;
        # gzip_proxied any;
        # gzip_comp_level 6;
        # gzip_buffers 16 8k;
        # gzip_http_version 1.1;
        # gzip_types text/plain text/css application/json application/javascript text/xml application/xml application/xml+rss text/javascript;

        proxy_hide_header X-Powered-By;
        add_header X-Frame-Options SAMEORIGIN;
        add_header X-Content-Type-Options nosniff;
        add_header X-XSS-Protection "1; mode=block";

        ##
        # Virtual Host Configs
        ##

        include /etc/nginx/conf.d/*.conf;
        include /etc/nginx/sites-enabled/*;
}