Good tip -- I ran it with both options checked and still had the problem, though. I should have listed that in my OP.
I have a great HD repair program called SpinRite that I tried running on it and it "bombed" out about 90% through connected to the USB port on the AV400.
So I got adventurous and removed the drive, attached it to an external 2.5" HDD enclosure (even though its a 1.8" HDD) and SpinRite ran all the way through on level 4 (deep surface scan) -- it took about 6 hours to run! It didn't report any surface errors, though, so I'm worried its an electronics problem in the AV400 itself.
I'll put it back together in a bit and see what happens. If that doesn't fix it, I'm guessing that there's a problem with the electronics in the unit itself and its time to replace it unless you all have any other suggstions.
I'll re-post with my results!