Here is nginx version (note: although it is compiled with passenger, I have not turned on the passenger directive in nginx.conf):

nginx version: nginx/1.2.6
built by gcc 4.6.3 (Ubuntu/Linaro 4.6.3-1ubuntu5)
TLS SNI support enabled
configure arguments: --prefix=/etc/nginx --with-http_ssl_module --with-http_gzip_static_module --with-cc-opt=-Wno-error --add-module=/usr/local/rvm/gems/ruby-1.9.3-p286/gems/passenger-3.0.18/ext/nginx

Here is nginx.conf:

user nobody;
worker_processes 1;
pid /etc/nginx/nginx.pid;

events {
worker_connections 1024;
accept_mutex off;
}

include conf.d/*.conf;

http {
upstream app_server {
server 127.0.0.1:8080 fail_timeout=0;
}
server {
listen 80 default;
server_name myapp.com;
root /var/www/myapp/public;

try_files $uri/index.html $uri.html $uri @app;

location @app {
proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;

proxy_set_header Host $http_host;

proxy_redirect off;

proxy_pass http://app_server;
}

}

# Try extreme timeouts to see if issue will reproduce
client_header_timeout 600s;
client_body_timeout 600s;
keepalive_timeout 600s;
proxy_read_timeout 600s;
proxy_send_timeout 600s;
lingering_timeout 600s;
lingering_time 600s;
send_timeout 600s;

error_log /var/log/nginx/error.log;
access_log /var/log/nginx/access.log;

include mime.types;
default_type application/octet-stream;

sendfile on;
tcp_nopush off;
gzip on;
gzip_http_version 1.0;
gzip_proxied any;
gzip_min_length 500;
gzip_disable "MSIE [1-6]\.";
gzip_types text/plain text/html text/xml text/css
text/comma-separated-values
text/javascript application/x-javascript
application/atom+xml;

include sites.d/*.conf;

include blockips.conf;
}