Music library has emptied

First, you should check your computer's drive for your iTunes media files. You may get an "empty" iTunes library, if the iTunes library database file (which is usually named iTunes Library.itl) becomes corrupted. The iTunes Library file keeps track of your songs and where their song files are stored on your computer's drive. If this file becomes corrupted, iTunes starts up with a brand new iTunes Library file, which is blank.

However, your actual iTunes media files may still be stored on your computer's drive and perfectly fine. The default location for the iTunes Media folder (unless you change it) is in your user home folder's Music folder, in the iTunes sub-folder, as described here

Manage and back up your iTunes media library - Apple Support

For Windows 8, it should be something like \Users\username\Music\iTunes\iTunes Media. Check that folder to see if your songs and other iTunes media files are there. They are organized into sub-folders by media type, artist, and album. If you find them, you can add them to your current blank iTunes library. No need to off-load song files from iPod.

NOTE: If you find your iTunes media files AND if you make regular backups of your user data (including your iTunes data), please post back. You may be able to restore your iTunes Library.itl file from your recent backup. Depending on how old your backup is, this may be preferable to adding your media files to a new iTunes library (because you get back the supporting data, such as playlists, ratings, play count, data added, etc.).

Otherwise, you can transfer song files from iPod to computer. But not using iTunes (except for songs purchased from iTunes Store). By design, iTunes syncing is generally in one direction only, from iTunes library to iPod. However, there are third-party methods and utilities that can transfer from iPod to computer. If you do an Internet search on something like "ipod music transfer," you should get some useful links, including an article by CNET on the topic.

Also, songs (and other media) purchased from the iTunes Store can be downloaded again at no cost

Download your past purchases - Apple Support

I have got the music into a folder which I have created on my PC.

This folder is different from the "iTunes Media" folder that iTunes uses, correct?

If you want iTunes to make a copy of your song files, and organize them into the designated iTunes Media folder (recommended), open iTunes preferences Advanced tab. The iTunes Media folder location is where iTunes stores songs by default, such as songs imported from music CDs and purchased from iTunes Store. There are two important settings (checkboxes). Keep iTunes Media folder organized and Copy files to iTunes Media folder when adding to library. Checkmark these settings.

Otherwise, if you want iTunes to link to song files from where they are added (and not use the iTunes Media folder for songs added manually), uncheck Copy files to iTunes Media folder when adding to library.

To add your song files, open iTunes window to show your music library. In Windows Explorer, show that folder with your song files (its folder icon). Drag the folder to iTunes window, and drop on music library. iTunes adds all compatible media files in that folder to your iTunes library. Or, you can use the command from iTunes menu bar, File -> Add to Library, and point to that folder.

If Copy files to iTunes Media folder when adding to library is checked, iTunes puts a copy of song files in the designated iTunes Media folder (organized by media type, artist, and album), and links to those files. You can confirm by doing a right-click Get Info on one of your newly added songs. On the Info window's File tab, look at location. It should show a file path to its location in the designated iTunes Media folder. That's where iTunes accesses this song's file.

If Copy files to iTunes Media folder when adding to library is not checked, iTunes links to the song files from where they are added. So, iTunes uses the song files from that folder.