I am experiencing the same problem. When I look at the image file column for each song, as you suggested, all of them show "inside file". I sent my computer in for repair, but before doing so,I saved the Library file to an external drive. They replaced the C:drive memory. When I got it back, I copied the backup library to my C:drive and reinstalled it. Everything is recovered except the cover art. Out of 1500 CDs, I show only 12 with cover art. This is after perhaps 4 hours. I created a second library and imported all of the music from the external hard drive. All of the art is included with the songs, but that second library does not include my playlists. I have tried to import just the playlists into the second library but I haven't been able to accomplish that either.