Wow. That is strange. I guess as long as it is bootable it should work.
To fix the playlist not opening just delete it and Hoster will create a new one.
When you open Tools\Songs Database Rebuild, what is the Destination location at the bottom (in Green)? Is it pointing to H:\MTU... or C:\MTU...? Check it in both 4.006 and 3.4 to make sure it is the same. It should be.
Is your C:\ drive accessable or do you have these two drives set up in a Mirror?