This could work

[Slatye]

I'm pretty sure that Mistake 1 is not actually a mistake. I'm trying to find the volume of stuff in the outer container that's at or below the water level. That'll be equal to the volume of the water in there, plus the volume occupied by the inner container. Volume occupied by the inner container is A_inner,external * h_sink. Then divide by the area of the outer tank to get the water level. I've spent a while trying to understand how your replacement expression would work, but I haven't figured it out yet - any chance of an explanation?

The second mistake is indeed a mistake. Now I'm working through the maths again, because while your final answer does seem much more reasonable than mine, I can't see how you got to the h_outer expression.

Edit: actually, now your answer is not making sense to me either! It has no dependence on A_inner,external, which implies that it doesn't care at all about wall thickness of the inner container. That doesn't seem right.