Multisite sub-directories IIS 7.5 change media/uploads location

I am running WP 3.8.1 Multisite. Sub-directories is configured. I have 10 sub-directory sites and 1 primary site. WordPress is running on a Windows 2008 R2 datacenter 64bit server with IIS 7.5. I have 2 partitions on this server; 60GB drive C for OS, IIS (inetpub), and WordPress and 100GB drive D intended for all the uploads that will be going into WordPress (pictures, docs, videos, etc…)

I’m trying to point each site’s upload path to a folder on drive D, to do this I highlight My Sites > highlight Network Admin > click Sites > I pick a site and click Edit on one of the sites > and on the Edit Sites screen I click on the Settings tab and scroll down to the field “Upload Path”. I want each site to have its own folder on the D drive, for example:

1.) Primary site (http://mydomain.com/) = D:\wordpress\uploads\primary\
2.) Sub-directory site named “foo” (http://mydomain.com/foo) = D:\wordpress\uploads\foo
3.) Sub-directory site named “bar” (http://mydomain.com/bar) = D:\wordpress\uploads\bar
4.) Sub-directory site named “test” (http://mydomain.com/test) = D:\wordpress\uploads\test

etc…

So after creating all the folders and editing each site’s upload path I did an upload test

Test #1 – Primary site

Dashboard > Media > Add New > Select File > choose file test.jpg > progress bar says “100%” then “Crunching” > I immediately notice the thumbnail for the image is broken, so I click Edit Media.

Permalink is http://mydomain.com/?attachment_id=184 and thumbnail is still broken so I click on “View Attachment Page” which takes me to a standard post page with broken image. I go back to Edit Media screen and check out the File URL which is http://mydomain.com/wp-content/uploads/test.jpg so I try to open that URL and get standard post page that says Page Not Found

If I open Windows Explorer and navigate to D:\wordpress\uploads\primary\, my image is there and the appropriate thumbnails that WordPress generates e.g. test.jpg (original), test-50×50.jpg, test-80×80.jpg, test-120×90.jpg, etc…

If I open Windows Explorer and navigate to C:\inetpub\wwwroot\wp-content\uploads\ the folder is empty

Test # 2 – Sub-directory site “foo”

Dashboard > Media > Add New > Select File > choose file test.jpg > progress bar says “100%” then “Crunching” > I immediately notice the thumbnail for the image is broken, so I click Edit Media.

Permalink is http://mydomain.com/foo/?attachment_id=18 and thumbnail is still broken so I click on “View Attachment Page” which takes me to a standard post page with broken image. I go back to Edit Media screen and check out the File URL which is http://mydomain.com/foo/wp-content/uploads/sites/2/test.jpg so I try to open that URL and get IIS error page that reads:

Error Summary
HTTP Error 404.0 – Not Found
The resource you are looking for has been removed, had its name changed, or is temporarily unavailable.

Detailed Error Information
Module: IIS Web Core
Notification: MapRequestHandler
Hander: StaticFile
Error Code: 0x80070002
Requested URL: http://mydomain.com:80/wp-content/uploads/sites/2/test.jpg
Physical Path: C:\inetpub\wwwroot\wp-content\uploads\sites\2\test.jpg

If I open Windows Explorer and navigate to D:\wordpress\uploads\foo\, I see that wordpress created a folder that I did not create called “sites”, when I click on “sites” I find another folder wordpress created called “2”, I click on the folder “2” and I find that my image is there and the appropriate thumbnails that WordPress generates e.g. test.jpg (original), test-50×50.jpg, test-80×80.jpg, test-120×90.jpg, etc…

If I open Windows Explorer and navigate to C:\inetpub\wwwroot\wp-content\uploads\ the folder is empty

I’m guessing it might have something to do with my rewrite rules in web.config so I’ll post that here:

<?xml version="1.0" encoding="utf-8"?>
<configuration>
	<system.webServer>
		<httpProtocol>
			<customHeaders>
				<clear />
				<add name="X-UA-Compatible" value="IE=edge" />
			</customHeaders>
		</httpProtocol>
		<staticContent>
			<remove fileExtension=".svg" />
			<mimeMap fileExtension=".svg" mimeType="image/svg+xml" />
		</staticContent>
        <handlers>
            <remove name="PHP54_via_FastCGI" />
            <remove name="PHP55_via_FastCGI" />
            <remove name="PHP53_via_FastCGI" />
            <add name="PHP5_5_via_FastCGI" path="*.php" verb="*" modules="FastCgiModule" scriptProcessor="C:\Program Files (x86)\PHP\v5.5\php-cgi.exe" resourceType="Either" />
        </handlers>
		<rewrite>
            <rules>
                <rule name="WordPress Rule 1" stopProcessing="true">
                    <match url="^index\.php$" ignoreCase="false" />
                    <action type="None" />
                </rule>
                <rule name="WordPress Rule 2" stopProcessing="true">
                    <match url="^([_0-9a-zA-Z-]+/)?files/(.+)" ignoreCase="false" />
                    <action type="Rewrite" url="wp-includes/ms-files.php?file={R:2}" appendQueryString="false" />
                </rule>
                <rule name="WordPress Rule 3" stopProcessing="true">
                    <match url="^([_0-9a-zA-Z-]+/)?wp-admin$" ignoreCase="false" />
                    <action type="Redirect" url="{R:1}wp-admin/" redirectType="Permanent" />
                </rule>
                <rule name="WordPress Rule 4" stopProcessing="true">
                    <match url="^" ignoreCase="false" />
                    <conditions logicalGrouping="MatchAny">
                        <add input="{REQUEST_FILENAME}" matchType="IsFile" ignoreCase="false" />
                        <add input="{REQUEST_FILENAME}" matchType="IsDirectory" ignoreCase="false" />
                    </conditions>
                    <action type="None" />
                </rule>
                <rule name="WordPress Rule 5" stopProcessing="true">
                    <match url="^[_0-9a-zA-Z-]+/(wp-(content|admin|includes).*)" ignoreCase="false" />
                    <action type="Rewrite" url="{R:1}" />
                </rule>
                <rule name="WordPress Rule 6" stopProcessing="true">
                    <match url="^([_0-9a-zA-Z-]+/)?(.*\.php)$" ignoreCase="false" />
                    <action type="Rewrite" url="{R:2}" />
                </rule>
                <rule name="WordPress Rule 7" stopProcessing="true">
                    <match url="." ignoreCase="false" />
                    <action type="Rewrite" url="index.php" />
                </rule>
            </rules>
        </rewrite>
        <defaultDocument>
            <files>
                <clear />
                <add value="index.php" />
                <add value="index.html" />
                <add value="index.htm" />
            </files>
        </defaultDocument>
	</system.webServer>
</configuration>

Here are my versions:

Windows 2008 R2 datacenter 64bit
IIS 7.5
IIS Rewrite Module 2
PHP Manager 1.2 for IIS 7
MySQL Server 5.5
MySQL Connector Net 6.5.4
WordPress 3.8.1