I slept over it and started all over by restoring old disk image to regular1 TB hard drive. Watched some youtube videos about symlinks and now I got it sorted out.
Apparently in explorer the libraries folders have "My" in front of them butthe actual path to the folder doesn't contain "My". So when in explorer I open up the users\name folder, I can see for example "My Documents" but when I click the address bar at the top, the path strangely enough changes tousers\name\documents. Thank you microsoft for making things more difficultthan they should!
The symlink GUI didn't work so I used command prompt. I still don't understand when to use mklink /d or /j or /h. I used /d.
My Documents:
I cut "My Documents" out of C: and paste it into D. Then created symlink:
mklink /d "C:\users\name\Documents" "D:\Documents" did it even though the folder appears as "My Documents" on D and Documents on C.
My Music:
when this was cut and pasted into D, iTunes started nagging and a folder remained on C which I could not delete (iTunes Media folder). After reboot Icould delete this folder from C. Created symlink (using "Music" and not "My Music") and then opened itunes to change default media folder location back to the symlink on C (C:\users\name\my music\iTunes\iTunes Media)
My Pictures:
When these were moved to D, iCloud control panel started whining it could not find my iCloud photo stream location. Resolved after creating symlink.
This was really a pain in the *** but finally it looks alright now. Making disk image of my cleaned up smaller C drive now so I can restore it onto the SSD (again).