With WordPress, I am using a category specific template file (category-3.php) to display 5 posts at a time. I am using the following for paging:

<?php 
$paged = (get_query_var('paged')) ? get_query_var('paged') : 1;
query_posts($paged . '&posts_per_page=5&cat=3&paged=' .$paged); 
?>

I've been using this for a while now along with the wp-pagenavi plugin and it's worked fine.

Recently I noticed that clicking page 1 and 2 were fine, but any subsequent page after that cannot find posts? Am I doing something wrong?