I also use customized folder paths for mods and downloads (outside of the MO folder) with MO. With this setup, MO is installed at D:\Skyrim Mods\ModOrganizer, and DSR is installed at D:\Skyrim Mods\Mods\Dual Sheath Redux.
I was able to solve the DSR patch problem (unable to find skyrim.esm and update.esm) by copying the entire SkyProc Patcher folder from DSR into MO's overwrite folder, then adding it in MO as an executable.
MO executable entry --
Title: DSR Patcher
Binary: C:\Program Files (x86)\Java\jre7\bin\javaw.exe
Start in: D:\Skyrim Mods\ModOrganizer\overwrite\SkyProc Patchers\Dual Sheath Redux Patch
Arguments: -jar "D:\Skyrim Mods\ModOrganizer\overwrite\SkyProc Patchers\Dual Sheath Redux Patch\Dual Sheath Redux Patch.jar"
When run from within MO, the patcher places the "Dual Sheath Redux Patch.esp" file into the \overwrite folder, which seems to work fine.
Yes, I joined just to post this. :o_O: