ITunes Library corrupted in weird way, how do I correct or rebuild?

Question

For the record, I'm running iTunes 8.2. I have 27K+ tracks total. All of my CD rips are ripped twice, one for Lossless for home use and the second as 256K AAC for iPod/iPhone use. My tracks sit on my home Leopard Server, but the iTunes library is on a local machine (Mac Mini 2009).
Several point releases ago (probably in iTunes 6 or 7), iTunes had a problem where certain tracks got ripped from CDs as protected tracks (.m4b). I didn't realize it until l started doing an inventory of my library (purchased from iTunes Store). Over time, I had deleted many of the protected tracks (reripping them to .m4a format) but many of them were still files (.m4b) on the server. I ended up manually deleting all of those files recently. Best I can tell, all the tracked that search as "protected" in my library are songs purchased from the iTunes Store but not yet converted to unprotected AAC. (about 70 tracks).
But those "phantom" protected tracks still show up in weird ways. First, they were incorporated into playlists over time so I have that editing to do. But they also still show up in Smart Playlists, as if they are still listed in the library somewhere. Also, they show up in shared library functions, like if one of my laptops is sharing the main library, or even with third party apps like Simplify Media.
My theory is that the iTunes Music Library still lists these files but its only used for stuff like Smart Playlists and sharing. If this is the case, how do I excise the bad data from the library? If I do a rebuild (dragging the XML file to the desktop), will the references to the bad data just end up in a new XML file (this seems to be the case in every major iTunes update in recent months). If I rebuild without it and do a reimport of the files, what happens to my iPods, two iPhones and all their data/apps?
Thanks

Answer 1

The iMac 500 doesn't have a DVD drive, and I don't have a firewire cable to hook it up to the 800 in Target Disk mode.
Anyway, I am wondering if it has something to do with my network layout? The iMac 800 is on a different router than the iMac 500. This doesn't interfere with normal network operations - but does iTunes intentionally block this to prevent sharing outside one's own network? If so, isn't there something that can be installed on one or both of the computers to get around that?