If you move all the annotation directory so it is in the same location relative to the books themselves, it should find them.
Thanks for your reply sjpt.
I have now returned my ebooks to their original positions inside my Digital Editions folder in my 'Documents' folder. The annototations have been recognised again thank you.
I use Dropbox as a method of backing up and my original intention was to have my annotations located in the Dropbox folder so that they would be backed up. I tried various combinations including putting the whole Digital Editions folder with all it's contents in my Dropbox folder but the Digital Editions application refused to look in the Dropbox folder for the files. It kept looking in my 'Documents' folder. I couldn't find a settings option to force it to look anywhere else.
I still haven't achieved my goal of having my annotations backed up in Dropbox like the rest of my work. Would you (or anyone else reading this) happen to know how to get the Application to look in a different location for the files?