@OP - are you trying to get the gx forwarder to read your hard drive, or install the forwarder with wad manager?
The games play fine. I'm trying to install the forwarder with Wad Manager.
Will that cause an issue since USB Loader GX is on the USB drive, not the SD card?
No, not if you are just installing a forwarder channel. Makes no difference.
WAD Manager did recognize the SD card and installed the forwarder. Unfortunately the forwarder did not work. When I click on it the Wii menu just reloads.
That means it can't find the file it's looking for. Refer to the guide for whatever loader you are using.
Downloads - USB Loader GX
maybe go there for the forwarder, you may have got an old one.
make sure the folder with the usb loader gx boot.dol is named usbloader_gx
Thanks for all the help. I tried the forwarder a few times and couldn't get it to work. I ended up installing the channel instead using a 2gb SD card as suggest by Krank. All is well now. :)