Drive Full after Defrag

[Abstract]

Not sure if this belongs under Hardware or Software.

The situation:
Win 7 32-bit.
2TB Hard Drive.
900GB full, 960GB free (48% used).
Wasn't very fragmented.
Ran TuneUp Utilities 2010 Thorough Disk Defrag.
Now only 127GB free. Windows Explorer and xplorer2 say so.
TuneUp Disk Space Explorer says total filesize = 900GB, but also says only 127GB free.
I have run chkdsk, checked for Restore Points, Shadow copies, Disk images, page file, hidden files... I can't figure out why the system thinks the space is used, but no files taking up that space.  I have spent hours reading about similar issues, but still no fix.
It may or may not be related, that this OS install has a bad corruption in device and USB Driver handling and possibly ntkrnlpa.exe. Also, when accessing an external drive, folders show up, but no files. Plugged into a different pc, and the files are there. I will have to re-install win7 soon, but I need to make partition images as a safety net. And to do that, I need my storage+backup drive.

The reason I ran the checks and defrag originally is because Acronis failed to make backup image, stating 'bad sector'.
Why is the disk reporting full, when it isn't; and how do I fix it?
Thank you.