It looks like my symbolic link was working all along. I just didn't have any media in the folder that LMCE knew how to play. It apparently doesn't know what to do with ISO dvd's. As soon as I copied a MPEG2 into the folder it showed up in the videos menu.
So, if you have a hard drive on your LMCE box with media you can get it to show up inside video folder like this:
sudo ln -s /media/hda5 ./hda5
In the example above, /media/hda5 is the location of my NTFS drive. LMCE will automatically scan the directories and subdirectories for video files. The same thing should work for audio, but I haven't tried it yet.