The HDD could be bad. Typically this is the message you receive after a hardware failure, as opposed to software corruption.
But you could try a software that looks at the drive bit-by-bit to build it's own Master File Table (MFT). Then the software typically lets you use it as you would any other explorer window. One I've used to recover both deleted files and files after experiencing a corrupt MFT is GetDataBack (for NTFS).
There are plenty of other pieces of software like it.
But no promises that you can get anything back. Like I said, one typically receives that message after a hardware failure...
The easiest way to tell whether or not the file system has been corrupted is to boot to a Linux Live CD and then try to browse to the external drive. If the files are all fine, then you can copy them to your main HDD and then perform a re-format.
You should also try running a chkdsk on the drive, that may clear up some problems.