epheterson on "Permalinks: %post% works, but 'custom names' don't"

Before you ask:

sites-available/mysite

<Directory "/var/www/vhosts/mysite/htdocs">
...
AllowOverride All
Order allow,deny
Allow from all
Options Includes FollowSymLinks MultiViews
...
</Directory>
<Directory "/var/www/vhosts/buygood.us/htdocs/blog">
AllowOverride All
Options FollowSymLinks
</Directory>

.htaccess (in root & /blog/ directories)

Options +FollowSymLinks
# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /blog/
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /blog/index.php [L]
</IfModule>

# END WordPress

When I hit 'edit' on the permalink and choose a name, then hit okay, it accepts, but does not work. When I refresh the page and look at the permalink, my custom name does not stick, it reverts to %post%

I've honestly spent days scouring the internet and trying everything I could find. Posting here is my last resort, any idea what to check next?

FYI this is an ubuntu linode box, so I have root access and ssh.