Translation:

The file 'iTunes Library' apparently is not a valid music library. iTunes has attempted to rebuild your music library and renamed this file 'iTunes Library (Damaged)'.

Net result: the music is still there, but I have to manually reconstruct all podcast subscriptions... if I can even remember them. Otherwise: good luck reading the proprietary database format.

Damn. Serves me right for being such a curious bastard. Note to self: next time wait. Let others do the mistakes of an early update.

Update: Ok, I think I got them all. After about the third podcast I realized that Google is much better than iTMS in quickly finding a podcast feed -- not only is iTMS extremely slow in loading pages, but Google occasionally shows feeds directly in the search result listing! Coolcoolcool.

Update 2: There's an article on macosxhints that explains how the subscriptions can easily be restored from the files in your iTunes Library. Good to know, but too late for me... Restore lost podcasts after iTunes 5 update