Try formatting the device and copying all the music onto it using MSC. I believe MTP encrypts the files in some way so they are not visible using MSC. If you use MSC for everything, I reckon it should work.
Of course, the Xbox 360 is supposed to be fully compatible with MTP... But I guess its not
@Satellite 6 - They seem to be basically the same thing for all intents and purposes. I bought the 360 because it had more RPG games at first (the PS3 caught up later) and now both consoles have pretty much the same games on them.