That folder would indicate the path inside of DOSBox, not your computer, of course. Is the parent folder of the 'SIERRA' folder mounted as C:? i.e., if the actual folder is C:\Oldgames\SIERRA\GKCD\ then the command in the [autoexec] section of your dosbox.conf should be
mount c C:\Oldgames
then DOSBox will see the game installed in 'C:\SIERRA\GKCD' and the GUSMIDI.DRV should be in the GKCD directory.