Category Permalinks messed up

https://chrislaursen.com
WordPress 3.1.1

Pretty sure this is connected with my recent upgrade to 3.1.1 as I have not changed any of the code in my index.php or category.php

Permalinks structure: /work/%postname%/ with no custom settings for Category or Tag links

Post Categories:
main Category: work
children of work: video, photo, web, animation

html links generated by get_category_link

OLD GOOD LINKS: chrislaursen.com/category/video

NEW PROBLEMATIC LINKS: chrislaursen.com/work/category/work/video

category.php:

<?php get_header(); ?>
<h3><?php if (is_category('54')) {echo "All Work";} else {single_cat_title();} ?></h3>
<?php if(function_exists('wp_page_numbers')) : wp_page_numbers(); endif; ?>
<ol>
<?php $posts = query_posts( $query_string . '&orderby=date&order=desc' ); while (have_posts()) : the_post(); ?>
	<li class="figure">
	<a href="<?php the_permalink() ?>" rel="bookmark" title="<?php the_title(); ?>">
	<?php
	$image_id = get_post_thumbnail_id();
	$image_url = wp_get_attachment_image_src($image_id,'large');
	$image_url = $image_url[0];
	?>
	<img src="<?php echo $image_url;?>" alt="<?php the_title(); ?>" title="<?php the_title(); ?>" />
	<h4><?php the_title(); ?></h4>
	</a>
	<p><?php the_time('Y'); ?></p>
	<p><?php the_category(' · '); ?></p>
	</li>
<?php endwhile; ?>
</ol>
<?php if(function_exists('wp_page_numbers')) : wp_page_numbers(); endif;
get_footer(); ?>

index.php:

<?php get_header(); ?>
<h3>Latest Project</h3>
<?php $posts = query_posts( $query_string . 'posts_per_page=1&orderby=date&order=desc' ); while (have_posts()) : the_post(); ?>
	<a href="<?php the_permalink() ?>" rel="bookmark" title="<?php the_title(); ?>">
	<?php
	$image_id = get_post_thumbnail_id();
	$image_url = wp_get_attachment_image_src($image_id,'large');
	$image_url = $image_url[0];
	?>
	<img src="<?php echo $image_url;?>" alt="<?php the_title(); ?>" title="<?php the_title(); ?>" />
	<h4><?php the_title(); ?></h4>
	</a>
<?php endwhile; ?>
<h3>Do This Now</h3>
<p class="firstp"><a href="<?php bloginfo('url'); ?>/contact" title="Contact" rel="bookmark">Hire us</a> for your multimedia projects: <a href="<?php echo get_category_link(4); ?>" title="view our video projects" rel="bookmark">video production</a>, <a href="<?php echo get_category_link(11); ?>" title="view our web design projects" rel="bookmark">web design</a>, <a href="<?php echo get_category_link(46); ?>" title="view our animation projects" rel="bookmark">animation</a>, and <a href="<?php echo get_category_link(5); ?>" title="view our photography projects" rel="bookmark">photography</a>.</p>
<?php get_footer(); ?>