Resolution:
The following is an example of creating a Standalone Director and Standalone Broker in Windows that have there own base directories and share an installation directory. (Linux will be similar).

    * Install and patch GridServer. For example, install in the directory C:\DS4
    * Create a Director Only Manager with its own base directory:
          o Create C:\DS4_Director
          o Copy in C:\DS4\datasynapse\conf\resin.conf from DS4 to DS4_Director.
          o Create C:\DS4\datasynapse\Director.bat containing:

          set DS_BASEDIR=C:\DS4_Director
          set RESIN_CONF=C:\DS4_Director\conf\resin.conf
          server.bat run -p C:\DS4_Director\pid

          o Run Director.bat. Configure Resin, then configure the Manager as a standalone Director.
          o copy C:\DS4\datasynapse\webapps\livecluster\WEB-INF\config\update*.properties to C:\DS4_Director\WEB-INF\config
    * Create a Broker-Only Manager with its own base directory:
          o create C:\DS4_Broker.
          o Copy C:\DS4\datasynapse\conf\resin.conf from C:\DS4 to C:\DS4_Broker.
          o Create C:\DS4\datasynapse\Broker.bat containing:

          set DS_BASEDIR=C:\DS4_Broker
          set RESIN_CONF=C:\DS4_Broker\confresin.conf
          server.bat run -p C:\DS4_Broker\pid

          o Run Broker.bat. Configure resin, then configure the Manager as a standalone Broker.
          o Copy C:\DS4\datasynapse\webapps\livecluster\WEB-INF\config\update*.properties to C:\DS4_Broker\WEB-INF\config.

If you ever patch the base directory, you will have to manually copy the datasynapse\webapps\livecluster\WEB-INF\configupdate*.properties again.

Also, DS_BASEDIR still refers to the original base directory, and not the separate directory containing the updateable files.