Git submodules don't work when having Drupal core in a subfolder

I have a folder setup similar to this one: http://randyfay.com/node/115. I am using symlinks for the "sites" and the "profiles" folders to have them outside of the Drupal root. The problem is that when I execute

drush dl foo

The following error is being thrown:

Unable to add foo as a git submodule of bar

It does download the modules in the right place, but it doesn't add them as Git submodules to the main repo. Is there a workaround for this?