If I am correct, you might have to make that hdd msdos ready, that means formatting with something like Western Digital Data Lifeguard Tools which has Quick and Full write zeros, quick takes about 2 minutes, Full takes a bit.
WDDLG:
|MG| Western Digital Data Lifeguard Tools 1.13 Download
after that you will need to make it msdos ready using win98 boot disk or gparted.
bootdisk:
Bootdisk.Com
gparted:
GParted -- Welcome
Western Digital Data Lifeguard Tools can format any hdd, usb etc. I suggest use Quick Zeros format, "2 Minutes".
this will remove a flag aka msftres.
I repeat do not let win7 manage the disk after the Quick Zero Fill Format. Use Win98 Boot Disk or Gparted to make that disk msdos ready...