Delete music from disk with iTunes

Doing a little iTunes housekeeping today and discovered an issue.

I know this used to work for me...I would delete a song and it would ask me if I want to delete from disk or remove from the library.

Now, I no longer have the delete from disk option showing up.

I would like to be able to use iTunes to delete things from my computer like I used to and cannot figure out what changed. Did they remove this from a recent update? (Running Lion 10.7.2 and iTunes 10.5.2)

It is possible I haven't tried this since upgrading to Lion, so maybe this is something that changed with Lion?

Any help would be appreciated.

 

I did that and now I get the dialog but it is missing the option to delete from disk.



It should be noted I have always put my music in a different folder than the iTunes/Music folder because I prefer to organize by Genre. It never seemed to matter since iTunes would allow me to delete things before though. I'm wondering if this behavior as it relates to non iTunes managed libraries has changed at all.

EDIT: I tried deleting a song that was located in the iTunes Music folder to test out my theory about this being a non-iTunes folder related issue and if I do CMD+Del it does work as expected.
I know for a fact I used to be able to do this...I have no idea what would have changed that this is now not working. But maybe I'll just rebuild my iTunes library and have it copy everything to the folder.