SOURCE: Info: barracuda 500 gig in
Quite commonly on external drives the usb interface will go bad in the external drives the hard drive enclosed is probably functioning ok. Would try a different usb cord just to make sure the cord is not the issue. If still does not work you may need to purchase a new enclosure that will have a new usb interface circuit board with it. If taken in for service they will probably tell you to purchase a new external drive.
Here is a video on recovering data a side from an external drive.Some steps are not necessary if you have access to an ide/sata to usb adapter. These are pretty inexpensive on ebay as well as replacement enclosures.
http://www.metacafe.com/watch/1000351/recover_data_from_external_hard_drive/
Hope this helps
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