Western Digital MyBook Elite external hard drives use hardware-based encryption chips to (optionally) encrypt drives using 256-bit encryption. This is OK for security, but horrible for data recovery. It is impossible to access (decrypt) the drive if the enclosure circuit board fails, even if the drive itself is fine. For this reason, I highly recommend not using the hardware-based encryption unless you have a solid off-site backup plan, such as Backblaze.
What if the Enclosure Fails?
If you’ve enabled the hardware-based encryption, the data on the drive is completely inaccessible without the encryption chip in the Western Digital enclosure. So a simple failure of the USB or power connector can mean your data is gone. Even if the drive is removed from the enclosure and connected directly to a computer, it will be unreadable because the hardware encryption chip is missing.
I’ve read that the drive may be readable in an identical Western Digital enclosure, because the encryption key is stored on the drive itself and not within the chip. Buying a new MyBook Elite enclosure, removing the new drive, and installing your old drive may allow for data recovery.
If the USB connector or power supply connector fails and encryption is enabled, your best option may be to repair the USB connector on the enclosure/board. A local TV repair shop or technical school is where I would start looking for help. You probably just need the connector soldered back on to the board. See this article for instructions on how to open the case and remove the drive/circuit board.
If other components on the board itself fail, your only chance of recovering the data is to remove the encryption chip from the failed board and transplant it to the board from an identical working Western Digital enclosure – this is not a cheap or easy thing to do. it’s much more difficult to de-solder and re-solder chips than it is USB or Power connectors.
What if the Drive Itself Fails?
If the drive itself has failed, and not the enclosure/circuit board, you must perform data recovery on the drive and enclosure as a pair. You will first need to decrypt the drive using the Western Digital utility and then use something like Runtime.org GetDataBack data recovery software (free demo available.) If you send the drive to a data recovery company, be sure to tell them the drive is hardware encrypted and send both the enclosure and the drive.
Great info from commenter Joze Volf:
Major problem with these drives is also the fact that when integrated sata drive (usually low quality like wd green) starts developing bad sectors, the usb bridge doesn’t handle it well. It simply freezes. So you can not get good data because the drive freezes after trying to access data on bad sector area. I can confirm that you can remove the drive from usb/encryption bridge, connect it directly to sata on mainboard (it handles bad sectors much easier), sector clone it to a new/good drives using a tool like ddrescue, connect the new drive back to usb/encryption bridge and your data is accessible. You will loose the bad sector data but you could at least access all other data/disk area. Well, if your file system metadata hasn’t been on bad sectors areas. If, then you should use some recovery programs afterwards.
A Better Alternative to Hardware Encryption
I would never use hardware-based encryption with an external hard drive. Hardware Encryption is somewhat more secure than software-based encryption because both the password and the encryption chip are needed to decrypt the drive. But for external hard drives, the encryption chip and drive are in the same enclosure. If a thief steals it, they get both the chip and drive.
If you do want to encrypt your drive, there are alternatives. For external hard drives, it’s every bit as secure as the hardware encryption and, if the circuit board or enclosure fails, you can remove the drive and attach it to a computer/different enclosure and still decrypt and access the data. See this article for various software encryption options.
See this article for instructions on how to open the case and remove the drive.
Protect your data with offsite backups:
If you encrypt your drive, data recovery is even more difficult, so I strongly recommend using an online backup service. So if your external drive fails, or in case of a catastrophic event (fire, theft), there is still a secure copy of your data. I highly recommend CrashPlan from Code 42, which gives unlimited online backup space for $3.96/month (and free backups between you and your friends/family computers.)