Comment by pavs

Just for reference for others who might be interested:

I had to install this public key from ubuntu server:

sudo apt-key adv --keyserver keyserver.ubuntu.com --recv-keys ABF5BD827BD9BF62

Had to remove nginx-full and nginx-common.

Then install nginx: apt-get install nginx

Even though I told the installer to keep the default config (which it did) but over-written /etc/nginx/conf.d/default.conf The only change I had to make was port number, since I am using varnish changed my port to 8080 for nginx. Restarted nginx.

  nginx version: nginx/1.4.1

Thanks for the help!