The page you set as the “Front Page” in Settings -> Reading is going to show up here– http://localhost/mysite/— no matter what its address might otherwise be. I can’t tell if you want that address or this one, though: http://localhost/mysite/home/
I can tell that the template is broken. The $args variable here:
query_posts( $args );
… isn’t set and so that query returns nothing, hence “the blog post listing is gone”.
There are a number of genesis functions in there. I am not sure what they do but perhaps that is why the template work here– http://localhost/mysite/home/— but not here– http://localhost/mysite/… _if I am reading you right.
You should be aware that using query_posts inside a template like that is very bad form. It causes a second set of queries to the database making it very inefficient. There is a note in the Codex:
It should be noted that using this to replace the main query on a page
can increase page loading times, in worst case scenarios more than
doubling the amount of work needed or more. While easy to use, the
function is also prone to confusion and problems later on. See the
note further below on caveats for details.
Again, I am not quite sure what you are trying to accomplish but I think that you should be using either home.php or front-page.php for this purpose instead of creating a page and setting that to the “Front Page” as you have. What you’ve done would be a good approach if you want a mostly static front page that still have editable content. To display a blog list, it is a bit inappropriate.