1. A method of on-line reorganization of data in a storage system having n+1 disks arranged in a RAID array when one of said disks falls while preserving concurrent access to said array by a user application, each of said disks in said storage system having a plurality of data blocks, a plurality of parity blocks, each parity block associated with n data blocks, a plurality of groups of parity block state bits, each group of parity block state bits indicating that said associated parity block contains parity information or data or the contents are undefined, and a group of array state bits indicating the condition of the array as "normal," "folding," "fully folded" or "unfolding," said method comprising the steps of: (a) receiving a read request from said user application to read a targeted data block; (b) interrogating said array state bits to determine the condition of said array; (c) if said array state bits indicate said array is in said "normal" state, then proceeding with a read operation; (d) if said array state bits indicate said array is in said "folding" state, then proceeding with a "folding" read operation; (e) if said array state bits indicate said array is in said "fully folded" state, then proceeding with a "fully folded" read operation; and (f) if said array state bits indicate said array is in said "folding" state, then also proceeding with a deliberate process to complete said reorganization concurrently with user application access to said array.