try_files always returns 404 with variable - nginx

Question

The try_files directive seem to always fail for me:
...
root /images;
location /media {
set $do_resize $uri;
# if ?resize=blah query present, rewrites do_resize to small/$uri
if ($arg_resize != '') {
set $do_resize 'small/${do_resize}';
}
try_files $do_resize $do_resize/ #fallback;
}
# placeholder for image resize server
location #fallback {
add_header Content-Type text/html;
return 200 "not found :/";
}
My folder structure:
| images
| test.jpeg
| small
test.jpeg
When requesting to http://foo/media/test.jpeg, it returns the image correctly. but when requesting http://foo/media/test.jpeg?resize=blah, it returns 404 not found. It should return the test.jpeg image inside the small folder.
Is it possible to try_files with a custom variable at all? I've never seen something else besides $uri being used for the try_files directive.

Answer 1

The if statement does not work inside the location block for some reason, but the use of if inside a location block is known to cause problems. See this application note.
Also, all nginx URIs begin with a leading /. So, the $do_resize inside the if block should be /small$uri.
For example:
set $do_resize $uri;
if ($arg_resize != '') {
set $do_resize /small$uri;
}
location /media {
try_files $do_resize $do_resize/ #fallback;
}