AK,
I would recommend exposing your MSG1 schema as a web-service (see http://iaimtomisbehave.org/2007/12/12/how-to-expose-your-schemas-as-web-services-in-biztalk/) and on the receive port of that web-service use an inbound map to transform MSG1 to MSG2 which is then subscribed to by your orchestration. The response message would need to be transformed back to the MSG1 response message on an outbound map in the receive port (don’t forget your receive port will be solicit-response, not one-way).
So, you’re not exposing the orchestration as a web-service but the schema that represents MSG1.
Hope this helps, Nick.