EDIT: Not applicable - thought the issue was the Wii not recognising the HD.
I just soft modded my Wii last night and got everything working fine bar the HD loader (USB loader 1.5). It just hangs on monting device whe i'm using an 80GB usb powered 2.5" drive. (doesn't time-out)
I tried everything I could find on t'internet the only thing I could get working right was a USB key (1GB) and that worked fine - so no issues with the hardware.
I tried CIOS ver 10 (from 13b) and then back again....I'm on system 4.1U if that means anything.
I finally fixed it by doing the following....
Run 1.5 loader
Connect hard disk JUST as it's spinning up and before it 'reads' the boot sector / partition tables hit A to read the usb mass storage device, hey presto the contents appear and the all load.
If I leave the hard disk in when before I load the loader, it hangs.
If I plug it in and leave it more than 10 seconds it hangs.
Strange but works....Must be something to do with drive polling.