I was, so I contacted YT.
Greed won out.
YouTube is implementing "tiers" to their premium services. "Gold," nets you basically what YT Red was intended to do (background play, AD free, Download for Offfline) "Silver" gives you background playback and download for offline playback but features limited ads. YT Red is barely a step up from free. You get background playback but full ads and no download options. Google Music is packaged with YT Red only. If you've lost both background playback AND are seeing ads, it sounds as if they didn't grandfather you into Gold and you'll need to clear the cache for the option and/or if that doesn't work, contact YT, themselves. They gave me the first month free but after seeing the price, Im probably gonna let it go entirely. Not worth the $18.99 for Gold, imo. Might be time to make the jump to Dailymotion.
where you hear about this tier stuff?