@edan, it might be more efficient for you to share your /usr/local/lsws/conf/httpd_config.conf and /usr/local/lsws/conf/vhosts/proxy-vhost/vhost.conf files here or with LiteSpeed tech support.
		
 
		
	 
 [/usr/local/lsws/conf/vhosts/nginx/vhconf.conf]
root@ols-proxy:/usr/local/lsws/conf# cat /usr/local/lsws/conf/vhosts/nginx/vhconf.conf
rewrite  {
  enable                  1
  rules                   REWRITERULE ^(.*)$ 
HTTP://nginx/$1 [P]
}
[/usr/local/lsws/conf/httpd_config.conf]
root@ols-proxy:/usr/local/lsws/conf# cat httpd_config.conf
#
# PLAIN TEXT CONFIGURATION FILE
#
#It not set, will use host name as serverName
serverName
user                      nobody
group                     nogroup
priority                  0
inMemBufSize              60M
swappingDir               /tmp/lshttpd/swap
autoFix503                1
gracefulRestartTimeout    300
mime                      conf/mime.properties
showVersionNumber         0
adminEmails               root@localhost
errorlog logs/error.log {
  logLevel                DEBUG
  debugLevel              0
  rollingSize             10M
  enableStderrLog         1
}
accesslog logs/access.log {
  rollingSize             10M
  keepDays                30
  compressArchive         0
}
indexFiles                index.html, index.php
expires  {
  enableExpires           1
  expiresByType           image/*=A604800,text/css=A604800,application/x-javascript=A604800,application/javascript=A604800,font/*=A604800,application/x-font-ttf=A604800
}
tuning  {
  maxConnections          10000
  maxSSLConnections       10000
  connTimeout             300
  maxKeepAliveReq         10000
  keepAliveTimeout        5
  sndBufSize              0
  rcvBufSize              0
  maxReqURLLen            32768
  maxReqHeaderSize        65536
  maxReqBodySize          2047M
  maxDynRespHeaderSize    32768
  maxDynRespSize          2047M
  maxCachedFileSize       4096
  totalInMemCacheSize     20M
  maxMMapFileSize         256K
  totalMMapCacheSize      40M
  useSendfile             1
  fileETag                28
  enableGzipCompress      1
  compressibleTypes       default
  enableDynGzipCompress   1
  gzipCompressLevel       6
  gzipAutoUpdateStatic    1
  gzipStaticCompressLevel 6
  brStaticCompressLevel   6
  gzipMaxFileSize         10M
  gzipMinFileSize         300
  quicEnable              1
  quicShmDir              /dev/shm
}
fileAccessControl  {
  followSymbolLink        1
  checkSymbolLink         0
  requiredPermissionMask  000
  restrictedPermissionMask 000
}
perClientConnLimit  {
  staticReqPerSec         0
  dynReqPerSec            0
  outBandwidth            0
  inBandwidth             0
  softLimit               10000
  hardLimit               10000
  gracePeriod             15
  banPeriod               300
}
CGIRLimit  {
  maxCGIInstances         20
  minUID                  11
  minGID                  10
  priority                0
  CPUSoftLimit            10
  CPUHardLimit            50
  memSoftLimit            1460M
  memHardLimit            1470M
  procSoftLimit           400
  procHardLimit           450
}
accessDenyDir  {
  dir                     /
  dir                     /etc/*
  dir                     /dev/*
  dir                     conf/*
  dir                     admin/conf/*
}
accessControl  {
  allow                   ALL
}
extprocessor lsphp {
  type                    lsapi
  address                 uds://tmp/lshttpd/lsphp.sock
  maxConns                10
  env                     PHP_LSAPI_CHILDREN=10
  env                     LSAPI_AVOID_FORK=200M
  initTimeout             60
  retryTimeout            0
  persistConn             1
  respBuffer              0
  autoStart               1
  path                    lsphp73/bin/lsphp
  backlog                 100
  instances               1
  priority                0
  memSoftLimit            2047M
  memHardLimit            2047M
  procSoftLimit           1400
  procHardLimit           1500
}
extprocessor nginx {
  type                    proxy
  address                 172.16.0.188:80
  maxConns                100
  pcKeepAliveTimeout      60
  initTimeout             60
  retryTimeout            0
  respBuffer              0
}
scripthandler  {
  add                     lsapi:lsphp php
}
railsDefaults  {
  maxConns                1
  env                     LSAPI_MAX_IDLE=60
  initTimeout             60
  retryTimeout            0
  pcKeepAliveTimeout      60
  respBuffer              0
  backlog                 50
  runOnStartUp            3
  extMaxIdleTime          300
  priority                3
  memSoftLimit            2047M
  memHardLimit            2047M
  procSoftLimit           500
  procHardLimit           600
}
wsgiDefaults  {
  maxConns                5
  env                     LSAPI_MAX_IDLE=60
  initTimeout             60
  retryTimeout            0
  pcKeepAliveTimeout      60
  respBuffer              0
  backlog                 50
  runOnStartUp            3
  extMaxIdleTime          300
  priority                3
  memSoftLimit            2047M
  memHardLimit            2047M
  procSoftLimit           500
  procHardLimit           600
}
nodeDefaults  {
  maxConns                5
  env                     LSAPI_MAX_IDLE=60
  initTimeout             60
  retryTimeout            0
  pcKeepAliveTimeout      60
  respBuffer              0
  backlog                 50
  runOnStartUp            3
  extMaxIdleTime          300
  priority                3
  memSoftLimit            2047M
  memHardLimit            2047M
  procSoftLimit           500
  procHardLimit           600
}
module cache {
  internal                1
checkPrivateCache   1
checkPublicCache    1
maxCacheObjSize     10000000
maxStaleAge         200
qsCache             1
reqCookieCache      1
respCookieCache     1
ignoreReqCacheCtrl  1
ignoreRespCacheCtrl 0
enableCache         0
expireInSeconds     3600
enablePrivateCache  0
privateExpireInSeconds 3600
  ls_enabled              1
}
virtualhost Example {
  vhRoot                  Example/
  configFile              conf/vhosts/Example/vhconf.conf
  allowSymbolLink         1
  enableScript            1
  restrained              1
  setUIDMode              0
}
virtualhost nginx {
  vhRoot                  $SERVER_ROOT/proxy/
  configFile              $SERVER_ROOT/conf/vhosts/$VH_NAME/vhconf.conf
  allowSymbolLink         0
  enableScript            0
  restrained              1
}
listener Default {
  address                 *:80
  secure                  0
  map                     nginx *
}
vhTemplate centralConfigLog {
  templateFile            conf/templates/ccl.conf
  listeners               Default
}
vhTemplate EasyRailsWithSuEXEC {
  templateFile            conf/templates/rails.conf
  listeners               Default
}