Working with previous adwords account?

I work as a web developer for a small company that sells lights and audio equipment. Being that "computer guy" most tech related issues fall on me. Recently, my boss asked me to take a look at their adwords campaign and make it better. I've done some adwords work before, but never on such a large scale as they have done.

Currently, they have about 10k keywords spread across 30 different campaigns. The way they have it set up is each brand is campaign, for example Peavey would be a single campgaign. Then each item under that brand gets it's own ad group with keywords. When they initially set up the keywords it was brute-force; add as many as possible. So each item was uploaded with as many keywords as they could think of that apply to it. So, no research or planning was done, they did however try to focus on more popular or new items though. They also made every single keyword an exact match.

As far as performance goes; it's all over the place. The majority of the keywords are getting little to no clicks or impressions. Some get a few, and a slim number, I would say about 20, get significant clicks.

To sum it up I've basically been given a huge list of 10K keywords and told to fix it. Also, from what I can tell they really don't have anything to actually track conversions. Granted, the majority of the keywords are likely to bring in fairly targeted traffic, they still have no way of knowing if the sale actually came from a paid click. As of right now having click troughs is their main benchmark.

So, my question is: Where should I start? I have a good opportunity here to make some effective changes and drum up extra business, but I'm at a loss of how to tackle this monster. I think the first step is to identify which keywords are effective and why, as well as which ones need work, but from there I'm open to suggestions.