Drupal Multisite - Subdirectory, Shared Hosting
There's a whole section on Multu-site how-tos on drupal.org.
The reason what you did is not working is that you symlinked the entire site, so there wont be a difference, you'll get the same settings.php file with the same db settings etc.
The magic happens in the sites folder, take a look at this handbook page, it looks like this is what you are after.
Probably You need to set the $base_url to http://www.mysite.com/foo/bar/drupal2 in settings.php in the ".../drupal2" installation.