Hi, I had the same problem and it was driving me crazy. I just solved it.
I had a pre-purchased album automatically download to my iPhone which I deleted as it was taking up too much space. It was then deleted from my iTunes library, was showing up as purchased in the store, but not allowing me to redownload it. It wasn't showing up anywhere in my iTunes library. I tried every suggestion listed here, with no luck.
I remembered that when I deleted the album, a little message popped up from iTunes telling me how to restore. So I tried deleting another album and the message popped up again, saying I could restore via my account information page.
I went to iTunes on my laptop, "account" on the menu bar, then "view my account"
There was an option for "hidden" purchases, next to it I clicked "Manage" and chose the option to view all hidden purchases and boom! it was there!
Hope this helps anyone else with the same frustrating problem.