Ran into this on Nicole’s new laptop.

The reason was because I had used cygwin rsync to copy over our documents from the old laptop and the iTunes Library.itl file ended up getting marked as read-only.

macosxhints.com has this page on the top: Recover from a ‘Library is locked’ iTunes error

However, all I had to was simply clear the read-only attribute on the iTunes Library.itl file and that seemed to do the trick.