Do you have another PC that you can try the external drive on?
If so, and you can copy the data onto that PC (and make a CD backup), then it puts you into a more comfortable position.
It is as likely (or even more so) to be your PC that's at fault, rather than the external disk.
Do other removable devices - CDs, other USB memory sticks etc. still work OK?
After one particularly annoying failure with an external USB device, I found that the entire removable file system on the PC had gone t1ts-up, leading to a re-installation of the OS (Win XP).
SD