How to make uploading large (more than 1MB) files work with nginx, rails and uploadify

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http://serverfault.com – I have problem with my production nginx configuration (on my development machine with mongrel everything works). My environment is: nginx as proxy, rainbows as backend running rails 3.1 application with ruby 1.9.2. When I'm trying to upload large file (more than 1MB) I see 502 error on my website and in nginx error log file: 2012/04/02 14:45:17 [error] 14415#0: *658 sendfile() failed (32: Broken pipe) while sending request to upstream, .... What I've tried: setting client_max_body_size 5m; keepalive_timeout 600; Uploading smaller files works fine. What could be the problem? (HowTos)