You cannot apply security.. and then copy from directories that are now hidden .. you should have started with the more secure method.. (otherwise you are just proving the security is useless as anyone could then break it with the instructions)..
I presume the 6.1 utility in Lion or ML is completely useless, but the 5.6 version will pop up a warning as soon as you attempt to apply apple user profiles that any existing info will be hidden.
I am not super good at doing Terminal commands but if you login with root access. it might be possible to move a directory .. all you are doing is showing that anyone else can also do it. But I think it would not work in the way you want... the files may still copy from the TC to the computer and back again. Did you do it over wireless?? That is why it was so slow..
See info about user permissions and how to change them.
The problem is, on a network drive some of drive control will be lost. You would need somebody really well aquianted with the whole file system to give you the commands.. and small changes via root in command line could wipe out the lot... with a simple keystroke. So you would need the whole lot backed up anyway.. as such you may as well just start over.
How are you going to back up itunes on the TC? There is no automatic backup on TC and TM cannot backup a network drive.. if the TC fails.. and they all do eventually... you will lose all your offloaded files.