You can run two blogs like that. In order to do it, you need to mark the blog folder as an "application starting point" within IIS. Which means to make the blog folder a separate, standalone application in IIS. If you have control
over IIS, you can do this yourself. If your site is hosted somewhere, oftentimes web hosts have a way through their control panel or via a support request to create an application starting point.
For this specific error you're getting, just remove the following from the web.config file in the blog folder:
You may also need to remove the other two as well