Why do I keep getting "unable to locate original file"?

Because iTunes cannot locate the files.

Did you move or remove the files? Did you allow another program to move or remove the files?

Do they actually exists on the computer any longer?

Mine says the same thing it showed up when I sycned my music to my ipad.

When you originally put the music into iTunes, it didn't copy them into the iTunes media folder. Now, it tries to play the song from the original location, which would be gone if you used an external storage device. Before you import more song into iTunes, make sure you go to edit>preferences>advanced, and make sure the box is checked next to "Copy files to iTunes Media folder when adding to library" and you shouldn't get that message for any music you add after that.

so does that mean that all my music that it did that to I won't be able to restore it to my computer without re downloading and paying for the song?

Restore the missing files from the backup of the computer. You do regularly backup your media and other important files, correct? Not doing so would be extremely unintelligent.

Sorry, I'm not sure what to do in this case. I had all of my music files elsewhere when it happened to me, so I just added them to iTunes again after I changed the setting.