Hmm.. ok. That sounds about right. Only 3 things left that I can think of (in order):
Is the drive sharing an IDE cable with a hard drive? I suspect not but I have to ask.
The IDE cable is faulty. Changing an IDE cable might help and its cheap enough to try. Some people have found that switching from a 40 wire to an 80 wire cable helped solve similar problems.
If those two things did not help, the last resort is to try running the drive on another system to see if it works. If it doesn't work, it's almost definitely defective. If it does work, it's probably some driver/software problem.
I can pretty much identify with how you feel. I just spent two days trying to diagnose a system which spontaneously reboots after about 5 minutes of use. I tried everything hardware and software wise and was finally forced to concede that the motherboard was screwed.
Try not to kill yourself over the drive. I can't say I blame you if you end up chucking the thing in a lake or something.