Ipod Touch Overcapacity Error after Upgrade to itunes 11

I just upgraded to itunes 11 and when I tried to connect my 32gb ipod touch it would not sync because it was over capacity by over 40gb.
I have a 64 bit windows 7 os.
What I have tried so far:
1) reboot ipod
2) reboot computer
3) Restore ipod
4) uninstall and reinstall itunes
None of that has worked.
I have unchecked every single thing within the menu so that there are ZERO FILES on my ipod but it still shows over capacity by 10 gb even when it is actually 100% empty.
I have saw other instructions that said this might have to do with the AAC conversion using a bad estimator but even when i unchecked that there was no change.
All of the extra usage seems to be tied into the "audio" category.
Please help!

Try this article. http://forums.macrumors.com/showthread.php?t=445821. Hope this helps!

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