permalinks not working correctly with subdirectory

Followed the codex to get my site where wordpress is in a sub-directory and all went well except for this:
Now the only permalinks option that will work is the default and I want to use the post name option.

I’ve looked for some fixes but not sure the best advice based on the version I’m running.

I could really use some help from someone who has run into this problem. I’m a relative newbie.

thanks.