This may be different at other schools - but at my current undergrad institution, my GPA is only determined from courses I took there. Some old transfer credits are being used to fill requirements for my BS, but only the credits transfer, not the previous GPA. This is great for me, b/c I have a 3.9+ over the last 3.5 years - even though my last undergrad semester before that, in 2000, I took two classes and failed them both!
The grad schools I applied to still wanted to see all the old transcripts, and it didn't stop me from getting into a top-5 school. So I really don't think you need to worry about adjusting your gpa, or your previous situation. It's not the most common situation but it won't be the first time they've seen it. Good luck!