PC hardware forum: Backup drive failure - hardware or software???

I have Bounce Back Ultimate for Windows XP which I bought from CMS a couple years ago. I also bought from them a 750GB drive to use as my total system backup. It has been a little jewel it just sits in the background and continuously backs up my whole system. I bought this specific set up because I am not a techie and wanted to be able to just swap out drives if my desktop PC failed.

It is just so innocuous I never stop to even think of it but it did dawn on me a couple days ago that I did not remember it backing up. The snip is a message to their forum::

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I also have recently [within the last 10 days per a message] had some problem with my BounceBack Ultimate,
. It has worked with no problems for a couple years and I am embarrassed to say I did not even notice it was not backing up. When I started looking I tried the control center and found that the "K" drive [my external drive] was "missing". I checked all the connections, made sure everything was secure in its slot--same result. I then changed the usb port in case the port was bad -- nada.

I then restored the system [XP, SP3] to 26 Oct 2012]. and this did nothing--same result, the drive is "missing".

Looking at the system information I do not find the drive listed. Obviously there is a problem with the drive but I have reached the extent of my hardware knowledge and do not know where to go now.
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Basically the moderator wrote back telling me to do exactly what I had already told him I had done; he also added:

"4. Utilize the Windows Disk Management application to determine if the hard drive if the drive is unformatted or if you need to manually assign a drive letter to this hard drive. More Information on how to use Disk Management. http://www.howtogeek.com/howto/22251/find-your-missing-usb-drive-in-windows-7-vista/"

I replied telling him I had done all that again except the Windows Disk Management application--do not even know if I have that plus I was unsure how the drive could not be formatted when it has been running for a couple years.

Bottom line--they sent me an RMA to return the drive and its power supply. Was ready to do this until I realized that my whole financial, medical, etc life is on the drive; I cannot share it. I would think the technicians would be ethical and the data would be secure but I do not want to take a chance.

Can anyone think of anything else I can check--the rest of my set up is working fine; we have had no power outages--my system is set up to run through an APC Back-UPS to take care of any problems.

The only unusual think I have had to do the last few weeks was a system restore about 6 weeks ago--I know it worked after that. The restore was done in conjunction with a Firefox ver 15.0.1 problem.

As you all can tell--I have reached my limit of knowledge. If I cannot solve the problem will just scrap the current backup drive and buy another one.

TIA