"The disc you inserted is not readable by this computer" message.

I get the following desktop message upon start up, "The disc you inserted is not readable by this computer."
There is no disc in the optical drive but there is an external 2TB Western Digital drive connected by Firewire that I use for Time Machine. I've used Disk Utiliity to check that and the internal drive and there are no problems indicated with either. I've also used ClamXav to scan for viruses and none are found. When I disconnect the WD drive and start up there is no message. Time Machine continues to back up and I can access that data. The only noticeable performance related issues are that the computer seems to operate much slower than before and I recently had problems with crashes and slowness while working on an iMovie project. (I'm using v10.0.3 and all other projects were completed with earlier versions.)
This is a 2.66 GHz Intel Core 2 Duo desktop with 4GB 1067 MHz DDR 3 memory.
Any thoughts/suggestions?

Hi Chuck,
No luck. I did not originallly install the WD software (I assume that's the "utility" you referred to) and the only way I know to do that now is to disconnect the drive, restart the computer, and reconnect the drive. Doing that brings up the WD software installation icon on the desktop. However repeated attempts at installation have all failed; it just sits there with an installation progress bar indicating progress that never ends nor requests additional installation approvals or information.
I'd like to resolve this but it's more of an annoyance than a problem. And I agree with you that it's probably not indicating an issue with the hard drive. So unless you or others have any alternative suggestions I'll just continue clicking past the warning at start up.
Thanks,
Bill

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