More Q's about WD external hard drive

Hello,
I have had a WD My Book external HD running on my laptop for nearly 3 years now. Today I needed to format my internal HD due to virus infections. After reinstalling Windows XP from a recovery disc, I was able to access all of my files from the External HD. While listening to audio files from my external HD, I was attempting to save a pic file onto my external HD. I Created a new folder, but when I attempted to open the new folder, my system paused then flashed a message stating that the folder could not be accessed do to I/O error. Music was still playing at this point, but I could not access any folders on my external HD. I shut everything down and rebooted. When I plugged the external HD into the USB port, Windows chimed and the blue light lit up on the HD, but My Computer does not recognize it. My external HD does not reach full speed as it has in the past. Just makes small clicking noises, then eventually nothing at all. I have been reading other posts and trying the advice given, but nothing has worked up to this point. Maybe my External HD is shot? Is is possible to retrieve data still? Help!