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After chatting with a senior Apple Support rep today we think we know what went wrong, it's only a guess but the most logical one.
My iTunes 'path' stopped at iTunes, I.e it was
C\Users\Jenny\itunes
And not
C\Users\Jenny\iTunes\iTunes Media
so when I clicked the Keep ITunes Media folder organised iTunes moved everything out of the iTunes Media folder into the main Itunes folder.
She also had an idea that might work to rectify the damage but will report back if we decide to try it.
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