USB Devices Compatibility List - WikiTemp
Use the bottom or left USB port (depending on position of Wii); make sure you don;t have one of those 2-connection HDDs (1 for data and 1 for power)
The NAND from a different Wii message was corrected last week by a new Hackmii release. You can download it and run another NAND backup if you like. Download from: BootMii.org. It's still version 3, corrected the bug, no version # change. You can also correct your current NAND copy with a hex editor (do a search of this site for this if you want to try).
You only see the system file msg with the USB HDD plugged in and the Wii is OK with no USB HDD?