Error when trying to move location of iTunes Library to external HD (tried obvious solutions)

Question

Okay, I got a new Western Digital 500GB external hard drive and wish to move the location of my iTunes library to it to free up space on my hard drive (ONLY 4 GB FREE -- PLEASE HELP)
MY COMPUTER:
15" MacBook Pro 250GB running 10.6.8
When I first got it, I followed the steps in the online tutorials to change the location.
iTunes > Prefs > Advanced >
Create new folder named "iTunes Library" and select it as default
Would you like to keep iTunes folder organized? I have read and read on what to do hear, and people only state that it asks that because I have that option checked in preferences, but they DON'T say whether to select 'Yes' or 'No'.  I have tried both to no avail.
File > Library > Organize Library > Consolidate Files
The VERY FIRST time I tried this, it was working.  I did not realize that the external hard drive was not plugged in all the way, so when I shifted the computer, it came unplugged and stop the transfer.  It was when I rebooted, plugged it in, and tried a SECOND time that it started giving me the error:
"Copying files failed because you don't have permission to change your iTunes media folder or a folder within it."
Here are the solutions I read and the forums and already tried:
1) Run and repair disk permissions, restart, try again... DIDN'T WORK
2) Find iTunes folder, right click, change permissions to Read and Write (was already set to that) DIDN'T WORK. And it doesn't give me an option to 'include all folders within'
3) Set back iTunes with time machine... DIDN'T WORK
Please help.. I don't know what else to try. It seems like it should be such a simple fix, and I can't put anything else on my hard drive until I fix it (no, I have nothing else to delete--all pictures I need to go through as I am an amateur photographer).  No excess apps other than what came on the comp except Photoshop and Microsoft Office.

Answer 1

I can copy the iTunes folders over to both drives manually but then iTunes does not see the files.) Hold Option, launch iTunes, select *Choose library* then select the iTunes library folder you coped to the external.