In the sequence, do you power down the external drive after the initial format? Try that. In my case (WD 500Gb), once the 8300HD completes the format, I get a message to that effect from the 8300HD, but the drive space does not yet appear
in the diagnostics page until I unplug and reboot once more. If your SATA connections are sound, the drive may be at fault. You cannot read it with a PC (encrypted).
This message should perhaps be moved to the 'external SATA drive works' thread.