Mapping hotspot to distort similar to sphere. Is it possible?

Greetings!

What I'm trying to accomplish sounds hard to me but I'm asking to see if anyone may know better and can me point in the right direction.

I'm trying to see if there's a way to overlay a 2nd rectangular level of another pano or layer that rotates (and distorts) along with the main spherical environment and when the 2nd layer reaches the center of screen the 2nd level will play a video seamless of particles.

I attached an image to help demonstrate my mission.

Thank you kindly

EDIT: I changed the title because I felt it wasn't the correct question to my concern.

I've managed to get a video overlayed with <hotspot > but not giving the results desired. Even with distorted=true the overlay is not distorting similar to my main sphere image pano. It appears the overlay hotspot does not warp in like sphere would. I attached an image of what my results are and another of the original image with a red square which is where the video hotspot should go.

Here's my code

<hotspot name="video"        url.flash="%SWFPATH%/plugins/videoplayer.swf"	     url.html5="%SWFPATH%/plugins/videoplayer.js"         videourl="pano_video_background.mp4"         posterurl=""         ath="-0.0" atv="0.0"         distorted="true"         width='456'             height='500'         pausedonstart="true"         loop="true"         volume="1.0"         directionalsound="true"         outofrangevolume="0.0"         onvideoready=""         onvideoplay=""         onvideopaused=""         onvideocomplete=""         onerror=""         alpha='1.0'         ox='0.0'         oy='5.0'         /><image>		<sphere url="pano_still_background.jpg" />	</image>