Itunes Version 11.1.4.62 changed my music folders

Question

3 or 4 years ago we purchased an IPOD
I downloaded itunes onto a Dell computer with Windows XP operating system  ---  it was version 10.2.2 
Just recently purchased a new computer with Windows 8 operating system.  Downloaded itunes on it – version 11.1.4.62
Took my external hard drive that had all my music stored on it – plugged it into my Windows 8 computer so it could see all my music files from that computer  --  went to edit selected preferences clicked on change & told it to look at my library in the itunes media folder that itunes had created from the previous version (10.2.2)   --- next   --- per itunes HELP instructions held down the  shift key to restart itunes and selected choose library --- selected my entire library that is in the itunes media folder.  At this point it scrambled it.  It spent 5 minutes looking at it and when it finished looking my folders were TOTALLY changed.   Itunes program took 4,205 songs that were in folders --- each folder by a particular artist – inside that folder were folders of “albums” by that artist.  This is EXTREMELY frustrating!  My wife spent countless hours putting every CD’s and cassettes we owned onto the external hard drive which put the music in itunes folders.  ALL that work is GONE!!!  I don’t dare synchronize my IPOD because I don’t want to loose all the albums/artists information on all the songs.  CERTAINLY don’t want to have to reload all the CD’s to the hard drive to have the information.
The “card”  that itunes had for each song that was like a “card file” that had year the song was recorded, BPM’s, and places for other information which we had added --- genre of music and what one would “dance” to the song which all showed up on the “main spread sheet” is now all gone!!!  I WANT IT BACK.  ALSO SOME of the music purchased from itunes was removed and placed in the “cloud”!  without asking if I wanted it there.   FRUSTRATING.  I don’t want it in “the cloud”, I want it on the external hard drive!
NOW, when I plug in my external hard drive & go to “my music/itunes media/music” there are a few “artist folders” with a song or so in the folder but there is an “Unknown Artists / Unknown Album /  ---- then 4,205 songs  --- each having a number example 01 A Little More Country Than That  ---- it added the number when it changed it to this folder ---- this is a song that I had on my computer  ----  there are numerous 01 songs ---- example 1-12 All My Exes Live in Texas

Answer 1

Device not recognized. Take note of item 5.
http://support.apple.com/kb/ts1538