I gave up on getting msdeploy to play nice. I just wrote a bat script that would be executed after msdeploy completed:
mkdir C:\inetpub\application_wwwroot\VirtualDirectoryPhysicalDir
ECHO adding read permissions to the app pool
cacls C:\inetpub\application_wwwroot\VirtualDirectoryPhysicalDir/t /e /g "IIS APPPOOL\MyAppPool":r
ECHO creating "info" virtual directory
C:\Windows\System32\inetsrv\appcmd add vdir /app.name:"WebApplication/AppVirtualDirectory" / /path:"/help/info" /physicalPath:"C:\inetpub\application_wwwroot\VirtualDirectoryPhysicalDir"
C:\Windows\System32\inetsrv\appcmd set vdir /vdir.name:"Medrio/MedrioWeb/help/info" /physicalPath:"C:\inetpub\application_wwwroot\VirtualDirectoryPhysicalDir"