GoDaddy's practice of hosting a sites within a virtual directory is not common. It causes all sorts of issues with all sorts of applications.

You probably need to place <location inheritinchildapplications="false"></location> around the system.web and system.webServer sections in your mojoPortal web.config file. The issue is that your second "site" is not a website at all, in relation to IIS. It is a virtual directory/application. Running .net applications inside of virtual directories can be a bit tricky but all you should need to do in this case is add the location tag as I suggested above.

My recommendation is to switch to a hosting provider that doesn't do really dumb things like this. There are two hosting providers recommended by mojoPortal, Arvixe and i7MEDIA. My company is i7MEDIA but I'm not making a sales pitch here. If you find Arvixe to be what you need, by all means sign up with them. Just give some thought to dumping GoDaddy. 

HTH,
Joe D.