This seems like a broken .htaccess-file. I too have removed /blog/ as the permalink path, but it had/should have no major impact on the use of the site. The error-log is correct, as WordPress by default opens mydomain.com/about/, and then places the page-content in the style of the theme.

I would say there are two highly possible reasons:

• .htaccess is broke, you could either error-check it yourself, or post the content here if you are unsure how it works.
• The Thesis theme does something “unusual” to the default functionality of WordPress (ie. forcing permalink structures, .htaccess configurations or alternate methods for content retrieval). You could check this by testing your site with the default (Twentyten) theme.

EDIT:

From the beginning of installing WPMS (WordPress Multisite), you are told to do three things:

1. Create a blogs.dir in /wp-content/
2. Paste some code in your wp-config.php
3. Paste some code in your .htaccess

(all this code is seen at Network Admin -> Settings -> Network Setup). That covers the standard WPMU installation, but at least in my experience does not create a working domain-mapping. So in addition to the Vanilla WPMU-install, I followed Otto’s tutorial on WPMS 3.0 Domain Mapping.

One of the important things in this tutorial, is the installation of two plugins: Domain-mapping and Sunrise. Both are actually remnants of WPMU (before Multisite was integrated into WordPress), but are kept updated for the purposed of Domain-Mapping. I’m not actually sure whether WordPress by default has a working system for domain-mapping integrated in 3.1, but I am still dependent upon those two plugins for using domains with my WPMS.