Mccree, I'm more of a Linux guy but I might be able to help, I do use OS X and BSD a bit. It sounds like your permissions have gotten messed up with the Lion upgrade, but it should be an easy fix. First, make sure you have a backup, even if you just back up the presently unusable folders, that way you can try various fixes without risking losing everything. Navigate to your /itunes (the'/' indicates a folder in case you're not familiar with that nomenclature) folder in Finder, it's probably under /Music. Ctrl click on the /itunes and select "get info." At the bottom of the menu that opens there's a "Sharing & Permissions" section, make sure your account has "Read & Write" privileges, you'll probably be prompted for a password to make changes. That might fix your problem, assuming that the permissions are okay in all your sub-folders.
Also, you probably want to run Verify and Repair Disk Permissions from Disk Utility. This is a good idea every once in a while on a Mac, especially after an OS upgrade. To do it you open Disk Utility, found in /Applications/Utilities, select your HD, click the First Aid tab and select Verify Disk Permissions. Once that's done running select Repair Disk Permissions, that's it. Doing that every once in a while can prevent weird permissions issues, and you can run it in the background while you use your computer for what ever else you need to do. Hope that works for you.
Milt
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