This is extremely frustrating!!
This is working for me now, but I'm not satisfied with it:
common settings: /%postname%/
optional: all default settings (no changes)
product permalink base: default
However now the permalink shows http://www.mydomain.com/product/productname
I want http://www.mydomain.com/category/productname
Breadcrumbs are showing the category correctly but the permalinks are not.
What's up? If I choose anything other than the default product permalink base, I get the page not found errors.
Ref: I just upgraded to the latest version of WooCommerce.