Got this working with the following on 0.7.44:
*************** ngx_http_memcached_create_request(ngx_ht
*** 280,285 ****
--- 281,289 ----
ctx->key.len = b->last - ctx->key.data;
+ // strlower key
+ ngx_strlow(ctx->key.data, ctx->key.data, ctx->key.len);
+
ngx_log_debug1(NGX_LOG_DEBUG_HTTP, r->connection->log, 0,
"http memcached request: \"%V\"", &ctx->key);