I don't imagine this is the answer you're looking for, but since you're "fine with trashing the whole process and trying something different"... why not add the largest hard drive you can afford—so you won't have to burn to CD? I haven't checked lately, but maybe it would even be cheaper.
That doesn't help, of course, with all that you already have offline. Maybe something I do you can be adapted to your situation. I like to keep track of all movies I've seen, even if I don't have the media (e.g., rentals, theatre viewings, downloads I've viewed and deleted). Unfortunately, as you've found, MC is not designed to track media which doesn't exist where it can find it. So I created a null file for all such titles, gave them AVI extensions and also saved a poster for each (i.e., same name, but a JPG). I also import information from my movie database to these records, but that's another story. I'm sure you could do pretty much the same thing, and also save a media label and location—so you can keep track of your CD's.