That's very strange. Your sure that there is an "FSX.exe" file in the folder, and that it didn't somehow get renamed? The installer logic is pretty simple, it's just looking for an "FSX.exe" file in that folder.
If for some reason, you really can't get it to see it, you could copy FlyInside from your "Steam" folder into the folder you want it in. FlyInside has the following files you'll want to copy:
- d3d9.dll
- d3dcsx_47.dll
- D3DCompiler_47.dll
- cairo.dll
- RocketControls.dll
- RocketCore.dll
- RocketDebugger.dll
- freetype6.dll
- zlib1.dll
- The entire DCOC Folder
Make sure to copy all of those files, especially the d3d9.dll file. You said you already have a "d3d9.dll" file, but given that FlyInside isn't installed to that folder yet, the one you're seeing is probably the wrong d3d9.dll (maybe from a different plugin, so back up the one you have).