I'm setting up a new site on 3.4.1 and the Permalinks will not work.
I have deactivated all plugins and switched to TwentyEleven and they still fail.
I can see through outputting
$wp_rewrite that the rules are being flushed when I chnage the structure, and
.htaccess is being updated, but no matter what I do, I just get a 404 error.
I also notice that it doesn't matter what structure I use (excluding default), all links are in the format of the /%postname%/ structure.
Any suggestions of what else I can try?