George, your settings are fine but it's impossible to delete 1000s of emails on Gmail without full knowledge of your actions. First when you delete, it goes to your Trash, then you need to delete again for it to be permanently deleted (before the 30 day window), you simply can't do that by mistake.
Trust me. I did it by mistake. The whole thing occurred as a result of my mistakenly clicking All to the Inbox list, when I wanted to Filter-delete only one item. I had a quick glimpse when I confirmed the delete that the whole Inbox list lit up yellow, and I thought “sod-it” now I’ve got to go and undelete one email from Porsche-Boxa, and two from Murraysworld, and so I went into the Filter list but could find only two items: one Boxa and one of Murraysworld and Deleted both.
I then went into Trash and moved the three emails I wanted back to Inbox, and deleted everything in Trash but it did no good because after that everything I received went into Trash, anyway.
My next step was to delete all 50 Filtered items one after the other down the Filter list, which immediately solved the Inbox problem.
I then noticed that my “Sales” Label-Folder was empty of everything except for one item which I received Friday, which was still there, and another folder was empty of everything except for six items which I received since Friday, which were still there.
So based on what you have told me, I can only conclude someone hijacked your account, which by the way is not Google's fault.
Why would they want to delete my emails?
I suggest changing your password immediately and doing all the normal security procedures such as virus and spyware scans etc.
I can’t change my password because the instructions are so vague. It says “Click “Change Password” next to “Security”, but doesn’t tell you where “Security” is, and so I can’t find it. Are you SURE Googlemail is supposed to be idiot-proof? It’s by far the most confusing website I’ve visited.
AVG Freeware does a scan every day, which “Click” on the BBC NEWS channel said was quite adequate, and which I’ve used for 20 years or so.