iTunes Support thinks the latest install must have erased most of song library or actual song files. Only 10% of the songs seem to be in the iTunes folder now, and they don't think it would be elsewhere in the computer.
I think all I can do is:
a) use third party software to transfer songs from iPod back to iTunes (how about this?
http://www.icopybot.com/); or
b) try and restore computer to an earlier date before the new software was installed.
Seems crazy that iTunes would screw up my library like that.