Well, that's the problem. Backing up over network usually creates a sparsebundle. Had you started it over network, then cancelled and connected directly to Mac over USB, TM would have picked up the sparsebundle and continued from there. [...]
1) delete the folder and resume with old sparsebundle (if it's not corrupt, you lose the recent backups)
2) delete the sparsebundle and continue with folder (you lose old backups)
3) leave everything as is. This way, your old backups are still in sparsebundle (you can mount it manually and copy files back from there) and new backups will continue writing into folder.
I've been backup up externally to it for over a year now, without any problem until now, and started backing it up externally this way. The old backups.db folder is from my old iMac, kept them just in case because I ended up formatting it. Looks like now I can probably delete it (literally forgot it was there until I had to check the disk), and get rid of those backups.
From what I can tell, I connected it over USB, and it did something funky and deleted my old sparsebundle, or unpacked it as a backups.db or something to get rid of it. A few days later it comes up with all these disk space issues for a first time backup (that is when I was alerted to the problem), and it had by now started another sparsebundle. From what I can see, it is still backing up into a sparsebundle, not a folder (it is connected via my wifi network ATM).
I could index the disk using something like Disk Inventory X, if it would help.
So basically I think as you guys said, the old sparsebundle, if it even exists somewhere still, is probably corrupt or something. I'll check and see if I can get a couple things and check for my old files, and then probably reformat the disk and check the permissions. Maybe go get another couple TB of storage as well and integrate into a RAID setup, or just have a backup across disks. I've only needed backups twice (well, now 3) times in my life, but it doesn't hurt to have them!
