Blur out this layer, choosing Filter ? Blur ? Motion Blur and change the layer's Blending Mode on Overlay.



Marge down again the layers and make a copy of the new layer. The new copy must be blurred out by using Gaussian Blur.



Change the layer's Blending Mode on Multiply and merge down the layers (ctrl+e).



Apply the command shown here to the new layer: Layer ? Layer Style ? Inner Shadow.