Http connect to proxy to websockets

I am having a hard time with this one. We have a websocket server listening on port 80 at myserver.com/wsDemo?ID=12. We need to test a client program by connecting it to this server through a proxy. I am trying nginx 1.2.7 as the proxy on port 8080, running on proxy-server. We want the client to connect to the proxy using http connect method, and then have the proxy create a tunnel to the myserver.com/wsDemo?ID=12 websocket app server. Here is my nginx config:

http { include /etc/nginx/mime.types; default_type application/octet-stream;

log_format  main  '$remote_addr - $remote_user [$time_local] "$request" '
                  '$status $body_bytes_sent "$http_referer" '
                  '"$http_user_agent" "$http_x_forwarded_for"';

access_log  /var/log/nginx/access.log  main;

sendfile        on;
#tcp_nopush     on;

#keepalive_timeout  0;
keepalive_timeout  65;

gzip  on;
server{
    listen  8080;
    listen  80;

    location /wsDemo?ID=12 {
            proxy_pass http://myserver.com:80/wsDemo?ID=12;
            proxy_http_version 1.1;
            proxy_set_header Upgrade $http_upgrade;
            proxy_set_header Connection "upgrade";
    }
}

# Load config files from the /etc/nginx/conf.d directory
# The default server is in conf.d/default.conf
include /etc/nginx/conf.d/*.conf;
} 

---------- Post updated at 01:50 PM ---------- Previous update was at 01:48 PM ----------

Currently, it seems like we just get 400 errors.

two listens seems wrong. The proxy listens on 8080, the web server is already on 80. Usually proxies just tcp connect for you, tunnels are for ssh.