I got a notice saying either "Time Capsule is failing," or "Time Capsule Disks are failing". What does this mean? And what can I do about it?

What does it mean when one gets a message that Time Capsule or its disks are failing?
What can be done about it, if it's a reparable situation?

Thanks for the info.
I will look into buying a large external hard drive as an option. But given that I can't seem to back up anyway, is there another option other buying another Time Capsule? Do any of the external hard drives have embedded intelligence that allows them to work off my other router.
This is the log file from my TC's last attempt at backing up:
Starting standard backup
Attempting to mount network destination using URL: afp://Xxx@Xxx._afpovertcp._tcp.local/Xxx's%20Tim
Mounted network destination using URL: afp://Xxx@Xxx._afpovertcp._tcp.local/Xxx's%20Tim
Failed to attach to image: /Volumes/Xxx's Tim-1/Xxx’sMacBook Pro.sparsebundle, DIHLDiskImageAttach returned: 35
Failed to mount disk image /Volumes/Xxx's Tim-1/Xxx’sMacBook Pro.sparsebundle (DIHLDiskImageAttach returned: 35)
Mount failed... waiting 60 seconds and trying again.
Ejected Time Machine network volume.
Attempting to mount network destination using URL: afp://Xxx@Xxx._afpovertcp._tcp.local/Xxx's%20Tim
Mounted network destination using URL: afp://Xxx@Xxx._afpovertcp._tcp.local/Xxx's%20Tim
Failed to attach to image: /Volumes/Xxx's Tim-1/Xxx’sMacBook Pro.sparsebundle, DIHLDiskImageAttach returned: 35
Failed to mount disk image /Volumes/Xxx's Tim-1/Xxx’sMacBook Pro.sparsebundle (DIHLDiskImageAttach returned: 35)
Mount failed... waiting 60 seconds and trying again.
Ejected Time Machine network volume.
Attempting to mount network destination using URL: afp://Xxx@Xxx._afpovertcp._tcp.local/Xxx's%20Tim
Mounted network destination using URL: afp://Xxx@Xxx._afpovertcp._tcp.local/Xxx's%20Tim
Failed to attach to image: /Volumes/Xxx's Tim-1/Xxx’sMacBook Pro.sparsebundle, DIHLDiskImageAttach returned: 35
Failed to mount disk image /Volumes/Xxx's Tim-1/Xxx’sMacBook Pro.sparsebundle (DIHLDiskImageAttach returned: 35)
Giving up after 3 retries.
Backup failed with error: 31
Ejected Time Machine network volume.
[End]
As you can see, not a very happy outcome. I would appreciate any additional ideas you might have about resolving this.
Regards,

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