You have files in the way.
Free space does not tell you the location if the free space. It is all over the place and files are spread all over too. This is why users fragment drives to get the parts of files together. It does not always move them all to the start of the drive, but does in many cases.
You may also run into unmovable files like the page file.
It is easy to see this issue in this image taken from Defraggler. Those files at the end would cause all kinds of issues and even worse you can see other files would stop me on the way.
You can use third party software like EaseUS partition manager to perform this action.
http://www.partition-tool.com/personal.htm
Please take care NOT to...