Media upload creating wp-content in wrong directory

Hi,

I currently run 2 WordPress Sites through one account at 1and1.com.
Both WP sites are in subdirectories in my home directory.

Whenever I try to add a new header image or upload any image at all, I get nothing but a blue question mark in a box. My media area will allow me to edit the photo, but it cannot be seen after that time. I went to check permissions and what I found was that upon uploading a new image, the site is creating a wp-content folder with the uploads in my home directory, rather than in my wordpress directory.

So, logging in with FTP to the home directory, it looks like:
logs
mysite
mysecondsite
wp-content folder

The wp-content folder for my site is already inside the site, but there are no uploads there, nor can I figure out how to direct the site to create uploads in it’s actual wp-content folder. Every time I delete the wp-content folder from the home directory and try to upload an image, the site just recreates it there (with perfect permissions, btw).

I’m not sure if this is a problem with the WP or with the hosting. Any ideas?

In WP, my general settings say:
WordPress Address (URL): http://mysite.com
Site Address (URL): http://mysite.com

In my 1and1 directory:
Domain name: mysite.com
My destination: Home Directory/mysite

I am sure this is probably a pretty easy fix and I am somehow just missing something easy…