how to set up wp in folder within static website?

Question

In my server I have the following file structure:

www/
  index.html
  js/..
  css/..
  img/..
  index.html
  ...
  blog/
    .htaccess
    index.php
    wordpress/
      .htaccess
      wp-config.php
      ...

Basically, www/ with some static files and the blog/ directory where I keep the wordpress files (so that if I want to login I have to go to www.mysite.com/blog/wordpress/wp-admin.php)

I have no problem login in, I have no problem displaying the front page, but when I try to access one of the posts or categories I am redirected to www.mysite.com/index.php and get the following error message:

Not Found

The requested URL /index.php was not found on this server.

Additionally, a 404 Not Found error was encountered while trying to use an ErrorDocument to handle the request.

I don't think it's an .htaccess problem, because both .htaccess files are there and I don't have any issues with permalinks while browsing the site locally... Any ideas on what could this be?

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

# BEGIN W3TC Browser Cache
<IfModule mod_deflate.c>
    <IfModule mod_setenvif.c>
        BrowserMatch ^Mozilla/4 gzip-only-text/html
        BrowserMatch ^Mozilla/4\.0[678] no-gzip
        BrowserMatch \bMSIE !no-gzip !gzip-only-text/html
        BrowserMatch \bMSI[E] !no-gzip !gzip-only-text/html
    </IfModule>
    <IfModule mod_headers.c>
        Header append Vary User-Agent env=!dont-vary
    </IfModule>
        AddOutputFilterByType DEFLATE text/css text/x-component application/x-javascript application/javascript text/javascript text/x-js text/html text/richtext image/svg+xml text/plain text/xsd text/xsl text/xml image/x-icon application/json
    <IfModule mod_mime.c>
        # DEFLATE by extension
        AddOutputFilter DEFLATE js css htm html xml
    </IfModule>
</IfModule>
<FilesMatch "\.(css|htc|js|js2|js3|js4|CSS|HTC|JS|JS2|JS3|JS4)$">
    FileETag None
    <IfModule mod_headers.c>
         Header unset ETag
    </IfModule>
</FilesMatch>
<FilesMatch "\.(html|htm|rtf|rtx|svg|svgz|txt|xsd|xsl|xml|HTML|HTM|RTF|RTX|SVG|SVGZ|TXT|XSD|XSL|XML)$">
    FileETag None
    <IfModule mod_headers.c>
         Header unset ETag
    </IfModule>
</FilesMatch>
<FilesMatch "\.(asf|asx|wax|wmv|wmx|avi|bmp|class|divx|doc|docx|eot|exe|gif|gz|gzip|ico|jpg|jpeg|jpe|json|mdb|mid|midi|mov|qt|mp3|m4a|mp4|m4v|mpeg|mpg|mpe|mpp|otf|odb|odc|odf|odg|odp|ods|odt|ogg|pdf|png|pot|pps|ppt|pptx|ra|ram|svg|svgz|swf|tar|tif|tiff|ttf|ttc|wav|wma|wri|xla|xls|xlsx|xlt|xlw|zip|ASF|ASX|WAX|WMV|WMX|AVI|BMP|CLASS|DIVX|DOC|DOCX|EOT|EXE|GIF|GZ|GZIP|ICO|JPG|JPEG|JPE|JSON|MDB|MID|MIDI|MOV|QT|MP3|M4A|MP4|M4V|MPEG|MPG|MPE|MPP|OTF|ODB|ODC|ODF|ODG|ODP|ODS|ODT|OGG|PDF|PNG|POT|PPS|PPT|PPTX|RA|RAM|SVG|SVGZ|SWF|TAR|TIF|TIFF|TTF|TTC|WAV|WMA|WRI|XLA|XLS|XLSX|XLT|XLW|ZIP)$">
    FileETag None
    <IfModule mod_headers.c>
         Header unset ETag
    </IfModule>
</FilesMatch>
# END W3TC Browser Cache


# BEGIN W3TC Page Cache core
<IfModule mod_rewrite.c>
    RewriteEngine On
    RewriteBase /
    RewriteCond %{HTTP:Accept-Encoding} gzip
    RewriteRule .* - [E=W3TC_ENC:_gzip]
    RewriteCond %{REQUEST_METHOD} !=POST
    RewriteCond %{QUERY_STRING} =""
    RewriteCond %{REQUEST_URI} \/$
    RewriteCond %{HTTP_COOKIE} !(comment_author|wp\-postpass|w3tc_logged_out|wordpress_logged_in|wptouch_switch_toggle) [NC]
    RewriteCond %{HTTP_USER_AGENT} !(W3\ Total\ Cache/0\.9\.2\.9) [NC]
    RewriteCond "%{DOCUMENT_ROOT}/wordpress/wp-content/cache/page_enhanced/%{HTTP_HOST}/%{REQUEST_URI}/_index.html%{ENV:W3TC_ENC}" -f
    RewriteRule .* "/wordpress/wp-content/cache/page_enhanced/%{HTTP_HOST}/%{REQUEST_URI}/_index.html%{ENV:W3TC_ENC}" [L]
</IfModule>
# END W3TC Page Cache core

Answer 1

It sounds like you need to copy the file /blog/index.php to /index.php and modify a line in the new copy you create:

require('./wp-blog-header.php');

to

require('./wordpress/wp-blog-header.php');

Here is a complete guide to moving Wordpress into a separate folder: http://codex.wordpress.org/Giving_WordPress_Its_Own_Directory