I got Typo working as I want it. The solution was adding a line to config/environment.rb to tell it to make all the links relative. I didn’t need the new strip-request-uri parameter for lighttpd.
ActionController::AbstractRequest.relative_url_root = "/blog"
Then I setup up the proxying. This was done through webmin but the directives produced were:
ProxyPass /blog http://znark.com:8090/blog ProxyPassReverse /blog http://znark.com:8090/blog