hello,
I made a template with several building blocks. I decided to create custom categories for those building blocks to help with organization.

After restarting my computer, all my blocks with custom categories are missing.

I have checked the app data>...microsoft....>103>16 and they are not there either.

Building Blocks I did not create a custom category for are not missing.

Please help! I spent so much time on this and now it is all gone

Have you checked the Building Blocks Organiser?
Did you save the building blocks to a template that isn't loaded?

I’ve checked. They were saved to the template that is loaded. But any ones with a custom category is gone.

If they are not in the template in which you created them it is likely that the template wasn't saved, and they're now lost.
Best practice is to store all important building blocks in a dedicated template that is loaded at startup.
Neither Normal.dotm, nor Building Blocks.dotx should be used.

I agree with Italophile.
Where can Building Blocks be stored?