Free space in C:/ Drive reduced drastically after defragmenting.

Good day. Need some help here in solving this mind-boggling issue.

First a background: the C:/ Drive (the only partition, I didn't split the partition into another drive) in my laptop's HDD has total space 581GB and the last time I check I have used up about roughly half of the that. So about four days ago my laptop was laggish horrendous so I decided the HDD in my laptop could use some defragmenting (21% fragmented when analyzed). It went on for 60 hours which I did let it finish with only 2% fragmented. To my horror however, the free harddisk space has went into the red with only 39GB left.

I've run through various advises available through Google (some them lead to this forum) such as Disk Cleaner (didn't see anything of significant size there though I should've known run Disk Cleaner first before defragmenting but I didn't. Could this mishap be the cause?), then followed by Disk check/CHKDSK during start up including ticking the Scan and Repair bad sector still showing the same amount of miniscule free space. Then tried Command Prompt (run as administrator) vssadmin list shadowstorage didn't reveal anything significant as well.

So what is else is left for me? Should I defrag again? Just downloaded CCleaner and going to try it. I think I've seen this sort of situation before (free space reduced to miniscule) a long time ago but DURING defragging and not AFTER defragging.

While the running of my laptop has certainly gone way smoother than it was, losing free space (at least 100GB) for no apparent reason after defragging is too much for me to bear. What else did I missed? Is it really the Shadow Storage/Disk Image issue that I have gathered from here and there online. Any solution that I can try?

While I do know I am quite a heavy internet user streaming Youtube videos and such pre-defrag, did those file that suppose to be temp ended up actually registering in my harddisk after defrag (didn't run disk cleanup before defragging)?

A useful free tool that can help show where space is used is WinDirStat.
WinDirStat - Windows Directory Statistics

Regained free space to what it should be (roughly half-ish of the harddisk)! Thanks to everyone for helping in providing step by step guides and tools! Good to know this forum and their users are reliable source of solutions if Windows 7 (and computer in general) cocked up. Consider this case solved then!