In my WordPress install instructions, I provided a link to a page on the WordPress site that has concise instructions for how to configure where your blog is located. I didn’t think I could add any value to what was on that page, so I just linked to it.
I was also having the dreaded login problem on another WordPress blog I manage. On that site, the blog was in domainame.com/blog/ and the wordpress directory was in domainanme.com/blog/wordpress.
I fixed the problem by upgrading to the newest version of WordPress. This was about a month ago. Since you are installing it now, I assume you would have downloaded the latest version even more recently. Unfortunately, all I can tell you is that the version of WordPress available about a month ago worked fine with the above directory structure.
I second MacManX’s suggestion to post on the WordPress support forums. There are a lot of people on those forums who know way more about WordPress than I do.