Unless I'm misunderstanding your question - you probably have all your songs listed with a '!' on them, correct?

If so, you should be able to point to the new directory for location and it should automatically pick up those songs. If you just add the new folder and drive letter, you will end up with duplicates which you will have to manually delete.

Unless you have a specific reason not to, can't you just start with a blank iTunes music list (delete everything) and then just add 'folder' which will automatically re-import all your music, albums, etc? I've done this several times and iTunes does it rather easily.