I've a suspicion this is a bug with iTunes. I don't think it in any way relates to LW. I might be wrong.

I've recently noticed many of my iTunes files also had the same problem. I keep my iTunes library on an external HDD because it's simply too large to keep on the computer. The files didn't even exist on the HDD. I had to use a file recovery program (norton) to recover as many files as I could (last week.) Definitely over 20 GB's worth. I had originally thought the problem was due to my external HDD. In fact, I swapped over from a 160 GB drive to a 250 GB drive because I simply wasn't happy with the 160. You can find reference to my displeasure here. My next step was going to be to upgrade to an even better external drive. I also backup other files to this drive so recovery wasn't easy.
I had also noticed the same as you, that initially the files 'were' in the music folder but lost their link.

I've been wondering whether the iTunes updates have also contributed to these problems. I recall 2-3 members saying something about after updating iTunes they lost part of or all of their library or something similar to that.

I'm wondering if iTunes can handle large libraries like I have (over 100 GB).

I've been thinking i might post about this on the iTunes forums.

BTW I did at one time keep a backup of my iTunes library on another external drive, but due to needs for my video work I was forced to abandon it & use it for video instead. I regret that but was desperate at the time.