Unfortunately, this does not sound really optimistic. Input/Output (I/O) errors are pretty common when the drive has been physically damaged, so it's possible that it might have bad sectors, which might have led to corruption of the files in that folder, causing the system to freeze when you try to access it.
At this point, the most important thing is recovering your files, so I'd advise you to try and access the drive via Ubuntu Live USB/DVD (this is basically a freeware, bootable, portable version of Linux), to see if it can properly recognize the drive and let you copy the files from that folder. If that doesn't help, you can give data recovery software a try:
http://www.tomshardware.co.uk/forum/id-1644496/lost-data-recovery.html & http://pcsupport.about.com/od/filerecovery/tp/free-file-recovery-programs.htm.
Please keep me posted.