Synching iPhone with iTunes

in Genius Bar edited January 2014
I have an original iPhone that I have been using problem free for 1.5 years. Then all of a sudden, when I tried to sync my iPhone with iTunes, I got a message that told me I don't have enough space to put all my music on my iPhone. I have an 8 GB iPhone, with 3.61 GB of music in my Library, along with some apps, photos and podcasts. But, I still have 2.5 GB free after every sync. So iTunes seems to thing that I have 8 GB of music. So after a few days, I finally decided to let it sync "a selection of music" to my iPhone. When it did this, it put all my songs on my iPhone and showed me I have 2.5 GB free. But, I lose all my playlists .

Any insight or advice would be greatly appreciated!
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