This happened to my Xbox 360 a while back. Started saying there was no HD and that I needed to format it. I did this and lost all my data. The HD started working again. There may be a problem with the HD itself (my theory) or the Xbox being able to read off it. Try taking it off then put it back down firmly making sure the slot is in place properly. If this doesn't work format it. If that doesn't work or you don't want to lose your data then send it to Microsoft. I personally have given up on console gaming and have turned to building my own gaming PC enthusiast-style.