It's simpler to copy your desired music files to the HDD first, then add them to a project in Studio.

Studio 8 has many niggles, and rather than spend time wondering why it won't do what you want, what I've said above will work fine.

Do you have Musicmatch? Or any app that will 'rip' music files? There are some free utilities on the web that will do this - do a google search, offhand, I can't think of any.