I tried your htaccess, and moved the files from wp-install to the root directory (this is also required I assume). I made a couple of changes to your htaccess file above:
This line seems to be missing a slash:
RewriteRule ^([_0-9a-zA-Z-]+)/wp-admin(.*) /wp-admin/$2 [L]
and although I didn't get an error the logout didn't seem to actually do anything. Also, in both layouts the import button just redirects you somewhere.
I can tell though that you're working hard to get this really great system working perfectly :-)
I'm wondering too why there is the requirement to log in at a particular page. I'm thinking that it would be much more intuitive for members to be able to log in on any login link, and for the system to be able to detect what your 'permissions' are for a particular blog, and display a logout link or admin link accordingly.
At the moment for bob to login to his page 'bob', he may go to
http://mu/bob/wp-login.php
whereas
http://mu/wp-login.php
Is this a 'bug' with subdirs or the intended behaviour? I'm thinking that if it is the intended behaviour then it may be very confusing for users. Most people would expect to be able to click any login button wherever it is and just login.