Mine works, and that is the same kind of folder structure I have, which is:
(/media/internal is the path for the USB mount)
I downloaded HPPlay on 7/9, had it automatically import my iTunes music list, built a new playlist, and then synced that playlist to my Touchpad. Music shows up in folders similar to your structure. When I fire up the Music App, it's all there - music listing in the songs, artists, albums, genres, and playlists.
Sorry I can't help, but that has been my experience with HPPlay and the Music app thus far. I was mildly impressed that it worked for me the very first time given some of the other bugs I've seen in some of the other apps.