removing these lines in /usr/local/rvm/gems/ruby-2.1.1/gems/passenger-4.0.41/ext/nginx/StaticContentHandler.c seem to have allowed it to compile properly

if (r->zero_in_uri) {
return NGX_DECLINED;
}

nginx -V
nginx version: nginx/1.7.0
built by gcc 4.4.7 20120313 (Red Hat 4.4.7-4) (GCC)
TLS SNI support enabled
configure arguments: --sbin-path=/usr/local/sbin --conf-path=/usr/local/nginx/conf/nginx.conf --with-http_ssl_module --with-http_gzip_static_module --with-http_stub_status_module --with-http_sub_module --with-http_addition_module --with-http_image_filter_module --with-http_secure_link_module --with-http_flv_module --with-http_realip_module --with-openssl-opt=enable-tlsext --add-module=../ngx-fancyindex-ngx-fancyindex --add-module=../ngx_cache_purge-2.1 --add-module=../headers-more-nginx-module-0.25 --add-module=../nginx-accesskey-2.0.3 --add-module=../nginx-http-concat-master --with-http_dav_module --add-module=../nginx-dav-ext-module-0.0.3 --add-module=/usr/local/rvm/gems/ruby-2.1.1/gems/passenger-4.0.41/ext/nginx --with-openssl=../openssl-1.0.1g --with-libatomic --with-pcre=../pcre-8.34 --with-pcre-jit --with-http_spdy_module --add-module=../ngx_pagespeed-release-1.7.30.4-beta