SOLVED: Jellyfin destroys itself.

[TheDreadPirate]

There is a possibility that your database is borked. But the specific error is complaining that some of the config XMLs are malformed. Stop Jellyfin then go to C:\Users\djdan\AppData\Local\Jellyfin\config and delete all the XMLs in there. Then start Jellyfin. Jellyfin will restore them with defaults.

40GB is not a lot of space, btw. Transcodes are written to disk. If you have a 70GB 4K HDR video (a typical file size) the transcode will be AT LEAST that big. Probably bigger if it is being transcoded from HEVC to H264.

Once you get Jellyfin back up and running, you can change where transcodes are written to in the Dashboard > Playback. The option "Transcode path". You can write transcodes to a drive with more free space.