I think you forgot to copy the _converter folder to the BFG Edition folder. The location of the _converter folder is important as the converter utility uses relative paths to find the input videos (and to know where to output the results). The "Found" text you mentioned refers only to the RAD Video Tools (and not to the input videos). Check the instructions in the manual again to make sure you didn't skip any step.
If you want to try the converter again, first move the "sound" and "video" folders from the cst_d3 folder to another location. This is needed because you have already converted the videos manually (if the converter detects that all videos have already been converted, it will immediately report that the conversion is complete).
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