In Drupal 6 I was able to successful install Drupal in a subdirectory called drupal and then reference the site without having to use example.com/drupal. In Drupal 6 to get this
Try with this :
RewriteEngine On
RewriteBase /example.com
RewriteRule ^$ drupal/ [L]
# rewrite rules for drupal files
RewriteCond %{DOCUMENT_ROOT}/example.com/drupal/$1 -f
RewriteRule ^(.*)$ drupal/$1 [L,QSA]
# rewrite rules for drupal paths
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule ^(.*)$ drupal/index.php?q=$1 [L,QSA]
Put this .htaccess file in example.com directory. You don't have to modify drupal7 .htaccess