Hi Roger,
I would not advise formatting the HDD at this stage. The B2 is very good at protecting the 'music' folder collection, so formatting the HDD is rather drastic at this stage. From the data that you have provided, I estimate that the 'disk used' figure should be something like 320 GB, so there is no problem with overall disk space, as you have 2 TB available.
1. Do you have an 'Export' backup that you could fall back on if necessary?
2. Does the B2 play music and show a list of artists and albums?
The first process that I would run is 'Scan Disk'. This will rebuild the B2's internal reference database which the B2 uses to build the 'Setting & Status' report. 'Scan Disk' only reads the 'music' folder; it doesn't do any updating to the folder, so it won't do any harm.
Let us know how you get on with this.
Regards,
Peter.