Lost all my music on IPhone 4

Hi all...I'll try to set the scene as quickly as possible
I originally used Itunes and Iphone on computer #1
I bought a new computer #2, and set up my old computer in my sons room
Computer #1 developed a problem with connecting to the internet, if I try it somehow stuffs up the router and prevents computer #1 from connecting, as computer #2 is my work computer I dont want to do that until I get someone to take a look at computer # 1
In the meantime I downloaded itunes onto computer 2 (my work pc), but I didnt transfer my music over from computer #1
Then I went overseas, I downloaded some free games via wifi, this somehow stuiffed up the earpeice on my iphone and I couldnt hear people talking to me. Searched for a solution and was told to reset factory settings and save my music etc 1st. To be on the safe side I transferred my itunes library from computer # 1 onto a USB drive
After I reset my settings all my apps/games appeared fine on my iphone, but no music! I tried pluggiong my iphone back into computer#1 where all the music is stored, but itunes says it cant work with iphone because it needs to download a new version of Itunes
I guess what Im really asking is how do I get Itunes on computer#2 to recognise and download the songs on the USB drive? I can see Itunes on the USB, but when I open it and go to LIBRARY/Music....all I see is about 7/8 of my songs...as well as a few other songs I dont recognise "Bob Acri?". But even those songs...I cant drag them over to the device (iphone)
Synching and transferring vis the file menu doesn seem, to be doing anything
totally stumped and sans_music please help

3rd paragraph should read
Computer #1 developed a problem with connecting to the internet, if I try it somehow stuffs up the router and prevents computer #2 from connecting

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