My thoughts for the disappearing virtual directories is that your have remapped your default website virtual path (from c:\inetpub\wwwroot to c:\inetpub\wwwroot\MJDNN).  The previous virtual directories you have defined (when the default website was pointing to c:\inetpup\wwwroot) have dissapeared because you have changed the mappings.  In other words the old virtual directories cannot remap themselves to the new default website virtual path.  Changing the default website to point to c:\inetpub\wwwroot means that you do not need the virtual directory of MJDNN anymore.  If you browse the site http://localhost your dot net nuke website should load up because it is the new default website.  This is provided that you have the default.aspx webpage in the dotnetnuke physical directory and that you iis webserver default website recognizes the default.aspx in the documents tab in the properties page.

The 403 error could be a file permissions issue.  Check that you have set the appropriate users and permissions for the c:\inetpub\wwwroot\MJDNN directory.  You may need the following users and their associated permissions:

<server name>\aspnet user with modify, read & write, list folder contents, read, write permissions

<server name>\users group with read & write, list folder contents, read, write permissions

Give that a go.