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When I run /usr/local/nagios/bin/nagios -v /etc/nagios/nagios.conf
It displays information about version 4.1.1, however I saw that when I enter the command nagios
It displays information about version 3.5.1
Rob is 100% correct - you seem to have multiple nagios installations on your machine and they are not compatible. You should uninstall everything and then install from rpm or from source, but not both. I recommend installing from source.
If this is a VM and you can start over easily, then I would take that route.
I agree with Eric on this one. A clean CentOS virtual machine would be the easiest way to get this accomplished. I would make a tarball of your /usr/local/nagios/etc folder to make sure that you don't lose anything too important before you get rid of anything though.