Sounds like something to worry about but also sounds like you managed to create a net in case you fall. So down to business:
Billaboard wrote:I have done a mysqldump of the databases in my existing MySQL
From your dump I am assuming this created a .sql file with your databases and data. This is your net to catch you if you fall as this can be easily imported into xampp.
Make an exact copy of what you have now from "C:\Program Files\MySQL" to "C:\Program Files\MySQL - copy" (can't get worse as this is your secondary net. If anything happens and things get worse, just delete the bad mysql folder and make a new one from the " C:\Program Files\MySQL - copy")
Try stopping each and every service. I'm assuming your install of xampp is blank as I would get rid of this installation for now and focus on fixing the original C:\Program Files\MySQL (stopping the pull for either mysql instance and let it all go to one spot for now)
Focus on one port (either 3306 or 3308 whichever it is using), and make sure everything points to the one installation as it did before. Fix this first before trying to integrate xampp again.
Are you the administrator or have administrator privileges on your win 7 machine to be stopping the service? "Access is denied". The fact you went around and "cut the black and yellow wire" vs finding out why you aren't allowed to stop the service is a red flag as this was the start of your problems.
Once you have this fixed. Stop all services.
Install xampp fresh and upload the .sql file of your databases and data.