About six months ago, I converted to Windows 8. I had approximately 2000 photos in Picasa and I now have about 50. I opened my library and found all the folders that were there were now empty. It appears that I’ve permanently lost a lifetime’s worth of photos.
I’m very sorry to hear this.
From your description, I’m not exactly sure what happened. I don’t necessarily have a specific solution to help you recover what you’ve lost, but I have a variety of thoughts on this kind of situation.