Disk Utility's "Erase Free Space" screwed me over big time. Help Please.

Hey, I have a serious dillema. I free'd up disk space on my mac by transfering files to an external drive, and then used Disk Utility to erase unused disk space to do a thorough cleaning. Now it seems that out of thin air, Disk Utility said my Mac is out of disk space....it basically filled up my hard drive with 370GB's of god knows what.

Here's exactly what I did, step by step:

Basically, I wanted to clean up my hard drive a bit, as I was using about 500GB's out of my 750GB HD (on my MBP 10.6.8)

-Before I did this test, I did a verify + repair disk permissions, I also organized my computer's files... and just to be safe, I booted up from the D key so I could do an extended hardware test to see if everything was running smoothly. I then zapped the PRam. This was my pre-clean maintenence check.

-Then I transferred all of my files onto my external disk.

-After this was done, I dumped the files (that I used to transfer to my External) into the trash bin.

-I emptied the trash bin.

-Now I free'd up hundreds of GB's of space.

-It said that I had 376 GB's of free space in my hard drive. Yay.

Now here where it all went wrong:

-I heard that if you go into Disk Utility, and click on "Erase Free Space" that it goes over all the delted files (that aren't actually permanently deleted) and it permanently deletes them so that it frees up all the loose ends on your mac. I didn't want any ghost files, or any old installs or whatever...so I thought, yes.

Now...Disk Utility was doing this for me....and 2 hours later....it said that I was out of disk space. Disk Utility froze around the 90% completion-mark when it was "Creating Volume" (or something like that) and I had to quit Disk Utility.

Then, I exited....went onto my desk top and checked my Hard Drive.

It said that I had ZERO KB's available.

My hard disk was completely full. How is this even possible? I had 376 GB's of EMPTY space 2 hours earlier.

I tried to go into all of my files to see if there were any duplicates made..I checked terminal to see what went wrong, I checked console...I searched, and I searched...and nothing.

What. The. Heck.

Can someone please, please help me?