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Yes, that’s exactly what it was doing, so my husband removed it and replaced it with a new hard drive (internal)...a few years ago something similar happened to my computer, and there was a little hole-in-the-wall repair shop down the street. They had me bring a new external hard drive and they transferred all the documents, pictures, videos, etc. from the broken one to the new hard drive. Went to see if they could fix this current drive the same way, but they seem to have moved or gone out of business. :-( I’m so not a happy camper about this! :-(

I tried to transfer the info using that MS Files Transfer Wizard thing, but apparently I didn’t save the files correctly to my external hard drive because I can’t open any of the files now. (a usmt2 folder full of 56GB of .dat files)

Yep. That's catastrophic. Probably either the actuator or the actuator arm. It needs to be dissembled and the platter removed. The platter is then placed in HD with operable mechanics and then the data is harvested. It takes some time and needs to be done in a fairly clean environment with some specialty tools. That's where the expense comes from. Again, sorry.

Remember, hard drives are MECHANICAL. Everything that is mechanical has a useful life - they will all eventually fail. Back up. Back up. Back up.