I had a bit of an issue with this since I'm used to using arguments on view pages. To use node id as an argument with a block view you cannot simple use the "Hide view / Page not found (404)" under "Action to take if argument is not present". Instead, do the following:
- Select "Provide default argument" under "Action to take if argument is not present"
- Select "Node ID from URL"
- Save your view and include your block on the targetted pages
This way you'll be able to pass the nid argument in your URL to the block view. Whew!