After getting some help from someone at Esri, I was able to get this to work. The solution was to not use the referenced mosaic dataset at all (Step 3 in the workflow and blog post above) and for Step 2 add the source mosaic datasets to the new mosaic dataset as the default "Raster Dataset" (NOT the "Table" raster type suggested). I didn't have to create new Overviews, it used the overviews from the source mosaics.