Can't find folder on iMac but memory has not gone down (disk utility fail as well)

[greenthesound]

Hello! I'm trying to clear out my iMac 10.4 OS X because I'm handing it off to a friend (moving overseas, can't keep it anymore) so I've been deleting most of the stuff off the drive...I had a folder titled 'keeping' which is obviously the stuff I wanted to transfer to an external hard drive, it was about 50 GB worth of stuff.

I updated everything on the mac and then restarted it...and now I can't find that folder. All that's on my desktop is the 'Macintosh HD' icon, and not the 'keeping' folder. I've searched multiple times on the finder and on the computer in general for this folder, by name, by files in it...and nothing! Yet, it says I have only 137.44 GB free (out of 250 GB) and I literally have nothing else on the computer (my iTunes library also got wiped, but I'm not as worried about that).

I tried 'showing all hidden files' with the command function and I couldn't find it...and then I tried running the disk utility on the drive and got the message of "The underlying task reported failure on exit" and that it needs repairing.

I've screenshot it here: http://img215.imageshack.us/img215/3094/picture1puo.png
or here if that's too big: http://img200.imageshack.us/img200/8417/picture1pua.png

You can see it's in there...I have 95 GB used and 523,499 files on it...somewhere but I have no way of finding it!

[RemarkabLee]

Did you click, verify or repair? It looks like to me you clicked 'verify'. You need to click 'repair' to actually fix the reported problems from a verify.

[greenthesound]

It won't let me click 'repair disk' though :/

[RemarkabLee]

Boot from your restore discs and start Disk Utility from the drop down menu.