Is there an easy way to delete those items in iTunes that it 'can't locate' without having to go through and delete them all individually? The only thing I could think of was to delete my Library and then add it to Itunes again, but I'd rather not do that and lose all my ratings etc.
You could also have a look at Teridon's iTunes Scripts, Robert has a script in there "itunes
removenotfound" for dealing with songs that have the exclamation mark. It might be of some help:
Teridon's iTunes for Windows Scripts