Sorry zambz, I'm out of ideas. Don't know what that sub directory is for, your XBOX seems to be configured differently to my and others I have done this patch on. All my files are in the root on C: I just replaced them.
Maybe someone else knows what this sub folder is for and how it works? Have you used your XBOX on XBOX Live maybe that creates that sub folder after updating your XBOXDASH.XBE?
Actually another thing to try is copying all the files from the C partition from a 1.0 XBOX to yours and removing (after backing up) all your existing ones, except for the EvoX files. No idea if it will work or not but worth trying.
Also to find out what BIOS you have.. you should be able to find a EvoX skin that will tell you the BIOS version, otherwise add <BIOSVer> to one of the 'Text = ' lines in your or evox.ini or if you are using a skin, to the skin.ini and it will show the version. It should show up as something like 'EvoX 2.0' or 'Xctr2 4974' or 'Unknown'.