The problem is that the files are encrypted and your license files that you formatted away is your key for decrypting them. Without the key, nobody can decrypt them.
The theory that Microsoft had with this DRM was if they are your CD's and you rip them, if anything happens to the files that makes them unplayable you can rip them again, since you own the CD's. But you can't share those files with anyone else, so illegal file trading isn't possible.
I don't know of any way you can bypass the DRM in these files, unless you can actually play them. Every "DRM remover" and file converter that I know of requires the licenses to be installed on your PC and the files to be playable first. They are considered "fair use" converters, so you can play your files in other software and portable player devices that don't support Microsoft's DRM.
Even the "virtual CD writers" require the files to be playable. What they do is act as a phony CD burner drive, fooling WMP, allowing you to burn an image of an audio CD (saves you money by not having to burn on real CD media), which you can then rip to another format. But you can't burn them to any type of audio CD, real or fake, if they are locked and you don't have the key.
If you have lost your licenses, you are going to have to rip the CD's again (this time try a non-DRM format).