It turns out that at the current time (May 2013) most external housings support max 3TB. I was using one of those multi-purpose IDE/SATA 2.5"/3.5" converters which explains why it didn't work.
I just bought a new USB 3 external housing which is one of the few which support 4TB and it works beautifully
First, I would make a backup of everything on the drive that you don't want to lose. After you've backed up your drive, you'll want to try Western Digitals Formatting Program to reformat the drive.
If that doesn't work, you will have to do what is called a 'zero write' or 'low-level formatting', and then reformat the drive using the above software.
A zero write takes an extremely long time especially on a 3TB drive (try 12 hours for 350GB! I recommend trying to format it via WD's software FIRST; it writes over your entire hard drive with zeroes, effectively deleting ALL the information on the drive. This will delete ALL formatting and ALL data on the drive.
There are many tools to do this (note that with a 3TB drive it could take weeks), however definitely try using Western Digitals' program to do this first before trying others (then you can blame them if something happens :P )
Western Digital's Data LifeGuard
Use Only As A Last Resort:
If you have a HDD:
I recommend Darik's Boot And Nuke (DBAN)
Follow the instructions to install this onto either a cd-r or a pen-drive; remove any usb, cd's, or drives you don't want to be overwritten, then restart your computer with the pen drive/cd-r in it (do this on a computer you will not use for a while).
WARNING! DO NOT USE DBAN ON A SOLID STATE DRIVE. IT WILL NOT WRITE PROPERLY/COMPLETELY, AND COULD DAMAGE THE DRIVE.
If you have a SSD (Solid State Drive):
I have never used this software, and probably will not be able to help you with it, however it was recommended to me, so I felt I should include it.
LowLevelFormat - Does exactly what you need, and provides good information on their website
I hope for your sake that you do not have to do a zero write, but on the bright side it might increase your drive speed too. Good luck, and let me know how it goes!
Best Answer
Most likely the issue is due to external HDD powering down when unused for a while. This is a known issue. The drive goes to sleep by design to save power, and possibly extend the life of the drive, but it takes a few seconds to come up to speed after idling. If the PC requests data, and the driver has a short time-out, then an error occurs.
Depending on the model of the WD drive and the OS, you may benefit from installing updated drivers and drive management application.