I think you said your problem was that your iTunes would forget which folder you put your music in via Time Machine/Time Capsule. I'm not sure, but my guess is that Time Machine doesn't work the same as simply copying your data once onto an external hard drive. I believe that every time Time Machine updates itself (probably daily or every time you change a folder), then it probably creates a new location for the last folder that your iTunes was linked to. I could be way off or have misread your problem, but you might want to consider trying to use time machine for your backups, but partition a second part of the hard drive (or the connected WD passport) and make that an unchanging folder of your music, then link iTunes to that unchanging folder. See if that works as a solution. Again, just a guess.