After locating a song in my music folder, how do I transfer it back to my iTunes library?

You could try the "Add ... to Library" controls. See the following document for more information:

iTunes: About the Add to Library, Import, and Convert functions

Try these articles:

No content shows up in iTunes after updating

http://support.apple.com/kb/TS1967

This article may also be helpful:

Instructions for finding missing music and video downloads

http://support.apple.com/kb/TS1408