How do I run a site from a sub-directory?
I just had the same problem. I have solved it with htaccess file(ie. not nginx) in the root directory with the following code(although I have tested it only with simple index file, not with fully installed Drupal):

&lt;IfModule mod_rewrite.c&gt;
  RewriteEngine on
  RewriteCond %{REQUEST_URI} !drupal/
  RewriteRule (.*) /drupal/$1 [L]
&lt;/IfModule&gt;