It seems the module for the kind of partition (I assume a DOS/MBR partition label) is not installed by grub by default.

Use the following to install the required module as well:

grub-install --modules part_msdos --root-direcotry=. /dev/loop0

Then grub should be able to read the partition table, the filesystem and it should be able to load the next stage.

As a result the grub command ls should output something like:

(hd0) (hd0,msdos1) (hd0)

It seems the module for the kind of partition (I assume a DOS/MBR partition label) is not installed by grub by default into core.img.

Use the following to install the required module as well:

grub-install --modules part_msdos --root-directory=. /dev/loop0

Then grub should be able to read the partition table, the filesystem and therefore the installation contained in mnt/mydrive/boot.

As a result the grub command ls should output something like:

(hd0) (hd0,msdos1) (hd0)