See the FAQs for creating folder structures: /t/8016/1
If you use fully qualified filenames like
Z:\Media Library\Music\%albumartist%\%album%[\%DISCNUMBER%]\%TRACK% %title%
you will get the folder structure without the need to rename each folder level separately.
If you have problems with the length of the resulting filename, perhaps an expression like
$left(Z:\Media Library\Music\%albumartist%\%album%[\%DISCNUMBER%]\%TRACK% %title%,252) might help.